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US TSYS: Tsys Futures Close Near Session Highs, Mexico/Canada Tariffs To Proceed

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures pushed higher through the US morning session and held gains as equities dumped late in the session. The short-end was supported after a strong 2yr auction stopped more than 1bp through WI level, while drawing record demand. TU closed +01+ at 102-29⅞, while TY closed +06 at 109-28
  • Tsys options were skewed towards upside protection, matching the risk-off bid in early US session. Key flows included a short-term play targeting a the 10yr to hit 4.2% within a couple of weeks
  • Cash tsys curve flattened slightly, yields closed 2-4bps richer with the belly again out-performing. The 2yr closed -2.3bps at 4.175%, both the 5 & 7yr closed -3.7bps richer, while the 10yr closed -3.1bps at 4.400%, the lowest for the year. The 2s10s fell 0.50bps to 22.350
  • Trump stated that tariffs on Canada and Mexico will take effect as scheduled on March 4, after an initial delay. Speaking alongside French President Emmanuel Macron, Trump emphasized that the tariffs aim to curb undocumented migration and drug trafficking. Despite border security measures taken by Canada and Mexico, Trump insisted the tariffs would proceed. He also reaffirmed plans for "reciprocal tariffs," linking US levies to other countries' trade barriers, claiming the policy would strengthen the U.S. economy.
  • Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).
  • The Fed's Goolsbee is expected to appear of Chicago news shortly for an interview, while later today we have FHFA House Price Index, Conf. Board Consumer Confidence & Richmond Fed Manufact. Index
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  • Tsys futures pushed higher through the US morning session and held gains as equities dumped late in the session. The short-end was supported after a strong 2yr auction stopped more than 1bp through WI level, while drawing record demand. TU closed +01+ at 102-29⅞, while TY closed +06 at 109-28
  • Tsys options were skewed towards upside protection, matching the risk-off bid in early US session. Key flows included a short-term play targeting a the 10yr to hit 4.2% within a couple of weeks
  • Cash tsys curve flattened slightly, yields closed 2-4bps richer with the belly again out-performing. The 2yr closed -2.3bps at 4.175%, both the 5 & 7yr closed -3.7bps richer, while the 10yr closed -3.1bps at 4.400%, the lowest for the year. The 2s10s fell 0.50bps to 22.350
  • Trump stated that tariffs on Canada and Mexico will take effect as scheduled on March 4, after an initial delay. Speaking alongside French President Emmanuel Macron, Trump emphasized that the tariffs aim to curb undocumented migration and drug trafficking. Despite border security measures taken by Canada and Mexico, Trump insisted the tariffs would proceed. He also reaffirmed plans for "reciprocal tariffs," linking US levies to other countries' trade barriers, claiming the policy would strengthen the U.S. economy.
  • Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).
  • The Fed's Goolsbee is expected to appear of Chicago news shortly for an interview, while later today we have FHFA House Price Index, Conf. Board Consumer Confidence & Richmond Fed Manufact. Index