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US TSYS: Tsys Curve Continue To Flatten, 2s10s a Ytd Lows, NFP Later

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures trade slightly lower, narrow ranges late Thursday, scaling back some of the midweek rally that saw Mar'25 10Y futures climb to the highest level since prior to the December 18 FOMC announcement. Markets held ranges amid moderate two-way position squaring heading into Friday's headline employment data for January that is expected to slow to 170-180k from December’s strong 256k.
  • TU closed -0-01¼ at 102-27⅝ while TY closed -0-05+ at 109-18+, we have opened mixed in early morning trading in Asia, front-end slightly weaker.
  • Cash tsys yields closed flat to 2.5bps higher as the curve bear-flattened. The 2yr closed +2.5bps at 4.212%, while the 10yr closed +1.6bps at 4.434%. The 2s10s closed 1bp lower at 21.824 its lowest level for the year.
  • In tsys flows there were futures block trades in Ultra Bond contract included a mix of buys and sells and a total of five blocks in the WNH5 contract included a buy during afternoon session that bolstered the cash market. While in the options market the there was a large Treasury 10yr option trade, the March 109.50 straddle was sold in 8,000 size for premium of about $10m.
  • Initial jobless claims were higher than expected at 219k (sa, cons 213k) in the week to Feb 1 after an upward revised 208k (initial 207k). Unit labor costs rose by less than had been expected in Q4 2024, with the 3.0% Q/Q SA annualized rise (3.4% survey).
  • Focus will turn to Non Farm Payroll later today, we also have U. of Mich. Sentiment & Wholesale Inventories
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  • Tsys futures trade slightly lower, narrow ranges late Thursday, scaling back some of the midweek rally that saw Mar'25 10Y futures climb to the highest level since prior to the December 18 FOMC announcement. Markets held ranges amid moderate two-way position squaring heading into Friday's headline employment data for January that is expected to slow to 170-180k from December’s strong 256k.
  • TU closed -0-01¼ at 102-27⅝ while TY closed -0-05+ at 109-18+, we have opened mixed in early morning trading in Asia, front-end slightly weaker.
  • Cash tsys yields closed flat to 2.5bps higher as the curve bear-flattened. The 2yr closed +2.5bps at 4.212%, while the 10yr closed +1.6bps at 4.434%. The 2s10s closed 1bp lower at 21.824 its lowest level for the year.
  • In tsys flows there were futures block trades in Ultra Bond contract included a mix of buys and sells and a total of five blocks in the WNH5 contract included a buy during afternoon session that bolstered the cash market. While in the options market the there was a large Treasury 10yr option trade, the March 109.50 straddle was sold in 8,000 size for premium of about $10m.
  • Initial jobless claims were higher than expected at 219k (sa, cons 213k) in the week to Feb 1 after an upward revised 208k (initial 207k). Unit labor costs rose by less than had been expected in Q4 2024, with the 3.0% Q/Q SA annualized rise (3.4% survey).
  • Focus will turn to Non Farm Payroll later today, we also have U. of Mich. Sentiment & Wholesale Inventories