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US TSYS: Tsys Future Hold Steady Post Fed Sell-Off, GDP Later

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures are little changed today, with ranges narrow. TU is +00⅛ at 102-20⅜ vs overnight lows of 102-19¼, while TY is -04 at 108-28+ vs overnight lows of 108-27.
  • TY plunged through key support levels post the fed overnight, and briefly tested 108-28 (1.236 proj of the Oct 1 - 14 - 16 price swing)
  • The Fed's hawkish move has caused sharp moves in pricing with just one 25bps rate cut in 2025 and low odds for a second. Fed fund futures are now pricing in a cumulative 33bps of cuts through to December 2025.
  • Cash tsys have given back some of their gains, with yields now -0.5bps to +1.5bps, with the curve steepening. The 2yr yield is trading about 10bps higher for December, -0.5bps today at 4.348% remaining just below the November highs of 4.38%, while the 10yr has broken above the November highs, last +0.8bps at 4.522%, vs the yearly highs of 4.705%.
  • Overnight, Powell emphasized renewed inflation concerns, signaling a shift in strategy as the Fed capped 2024 with a third consecutive rate cut. Despite recent reductions totaling 100bps, Powell acknowledged that inflation progress has stalled, delaying the timeline to reach the 2% target to 2027. The Fed scaled back expectations for rate cuts in 2025, with Powell stating that further reductions hinge on clearer inflation improvement.
  • Later today we have GDP, Jobless Claims, Leading Index & Existing Home Sales

 

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  • Tsys futures are little changed today, with ranges narrow. TU is +00⅛ at 102-20⅜ vs overnight lows of 102-19¼, while TY is -04 at 108-28+ vs overnight lows of 108-27.
  • TY plunged through key support levels post the fed overnight, and briefly tested 108-28 (1.236 proj of the Oct 1 - 14 - 16 price swing)
  • The Fed's hawkish move has caused sharp moves in pricing with just one 25bps rate cut in 2025 and low odds for a second. Fed fund futures are now pricing in a cumulative 33bps of cuts through to December 2025.
  • Cash tsys have given back some of their gains, with yields now -0.5bps to +1.5bps, with the curve steepening. The 2yr yield is trading about 10bps higher for December, -0.5bps today at 4.348% remaining just below the November highs of 4.38%, while the 10yr has broken above the November highs, last +0.8bps at 4.522%, vs the yearly highs of 4.705%.
  • Overnight, Powell emphasized renewed inflation concerns, signaling a shift in strategy as the Fed capped 2024 with a third consecutive rate cut. Despite recent reductions totaling 100bps, Powell acknowledged that inflation progress has stalled, delaying the timeline to reach the 2% target to 2027. The Fed scaled back expectations for rate cuts in 2025, with Powell stating that further reductions hinge on clearer inflation improvement.
  • Later today we have GDP, Jobless Claims, Leading Index & Existing Home Sales