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US TSYS: Tsys Curve Twist Steepen, 10yr Hovers At 4.25%, Trump Speaks

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys curves have twist-steepened throughout the session, yields are -2bps to +2.5bps. The long-end is underperforming today, with the US & WN contracts trading below Tuesday's lows. TU is -01¼ at 103-16+, while TY is trading -10 at 110-30.
  • The 2yr is -1.5bps at 3.976%, while the 10yr is +1.1bps at 4.256%. The 2s10s is +2.5bps at 27.5bps, and are now steepened ~9bps since Monday.
  • Concerns over US tariffs' economic impact have fueled bullish Treasury bets, with JPMorgan’s client survey showing the most bullish positioning in 15 years. Large block trades and surging call option activity suggest traders are targeting 10yr yields falling below 4%, with some positioning for as low as 3.85%.
  • Trump has been speaking to a joint session of congress, He has spoken about cutting federal bureaucracy, fraud, and waste—highlighting DOGE. He justified the tariffs enacted today (20% on China, 25% on Mexico and Canada), framing them as tools to protect American workers, despite market turmoil, and proposed making car loan interest tax-deductible for US-made vehicles.
  • On foreign policy, Trump doubled down on border security, announcing a government-wide immigration crackdown, and addressed his recent pause on Ukraine aid, shifting focus to domestic priorities. He also pushed for expanded executive authority and briefly touched on cryptocurrencies, reiterating his Sunday call for a strategic reserve, though without new details.
  • Projected rate cuts through mid-2025 gaining vs. late Monday levels (*) as follows: Mar'25 at -1.4bp (-3.1bp), May'25 at -11.8bp (-14bp), Jun'25 at -27.9bp (-31.0bp), Jul'25 at -37.7bp (-42.6bp).
  • Later today we have MBA Mortgage Applications, ADP Employment Change, S&P Global US Services PMI, Factory/Durable Goods Orders & ISM Services Index
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  • Tsys curves have twist-steepened throughout the session, yields are -2bps to +2.5bps. The long-end is underperforming today, with the US & WN contracts trading below Tuesday's lows. TU is -01¼ at 103-16+, while TY is trading -10 at 110-30.
  • The 2yr is -1.5bps at 3.976%, while the 10yr is +1.1bps at 4.256%. The 2s10s is +2.5bps at 27.5bps, and are now steepened ~9bps since Monday.
  • Concerns over US tariffs' economic impact have fueled bullish Treasury bets, with JPMorgan’s client survey showing the most bullish positioning in 15 years. Large block trades and surging call option activity suggest traders are targeting 10yr yields falling below 4%, with some positioning for as low as 3.85%.
  • Trump has been speaking to a joint session of congress, He has spoken about cutting federal bureaucracy, fraud, and waste—highlighting DOGE. He justified the tariffs enacted today (20% on China, 25% on Mexico and Canada), framing them as tools to protect American workers, despite market turmoil, and proposed making car loan interest tax-deductible for US-made vehicles.
  • On foreign policy, Trump doubled down on border security, announcing a government-wide immigration crackdown, and addressed his recent pause on Ukraine aid, shifting focus to domestic priorities. He also pushed for expanded executive authority and briefly touched on cryptocurrencies, reiterating his Sunday call for a strategic reserve, though without new details.
  • Projected rate cuts through mid-2025 gaining vs. late Monday levels (*) as follows: Mar'25 at -1.4bp (-3.1bp), May'25 at -11.8bp (-14bp), Jun'25 at -27.9bp (-31.0bp), Jul'25 at -37.7bp (-42.6bp).
  • Later today we have MBA Mortgage Applications, ADP Employment Change, S&P Global US Services PMI, Factory/Durable Goods Orders & ISM Services Index