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US TSYS: Tsys Futures Edge Lower, Curve Bear-Steepens

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures closed Tuesday's session lower, comments from The fed's Bowman late Monday saw weakness in the tsys during the Asian session which continued following a surge in corporate issuances overnight, while weakness in gilts didn't helping after strong UK employment data. TU closed -02¼ at 102-22⅛, while TY closed -15 at 108-27.
  • Trump says auto import tariffs will likely be around 25% and will provide more details in April.
  • In tsys options, there was a focus on shorts in vol trades for both 10yr and SOFR options, with highlights including a $4.3m US 10yr play and a $5.5m SOFR straddle sale, per bbg.
  • Cash tsys curves bear-steepened, yields closing +4bps to +7.5bps. The 2yr closed +4.7bps at 4.306%, while the 10yr closed +7.4bps at 4.55%. The 2s10s 2.75bps at 24bps.
  • Data was mixed, with Empire State manufacturing beating and NAHB sentiment missing - but both reports suggested private sector concern over the growth and inflationary impact of tariffs, with New York State manufacturers expecting increasing price pressures over the next half-year.
  • Foreign holdings of US Treasuries fell by $119.8b in December to $8.51t but were up 7.2% y/y. Japan (-$27.3B to $1.06T), China (-$9.6B to $759B), and the UK (-$44.1B to $722.7B) led the declines. Meanwhile, Belgium (+$13.3B to $374.6B) and the Cayman Islands (+$17.6B to $418.9B) saw increases, Cayman is a popular location for hedge funds
  • Later today we have Housing stars, Building Permits, & FOMC meeting minutes 
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  • Tsys futures closed Tuesday's session lower, comments from The fed's Bowman late Monday saw weakness in the tsys during the Asian session which continued following a surge in corporate issuances overnight, while weakness in gilts didn't helping after strong UK employment data. TU closed -02¼ at 102-22⅛, while TY closed -15 at 108-27.
  • Trump says auto import tariffs will likely be around 25% and will provide more details in April.
  • In tsys options, there was a focus on shorts in vol trades for both 10yr and SOFR options, with highlights including a $4.3m US 10yr play and a $5.5m SOFR straddle sale, per bbg.
  • Cash tsys curves bear-steepened, yields closing +4bps to +7.5bps. The 2yr closed +4.7bps at 4.306%, while the 10yr closed +7.4bps at 4.55%. The 2s10s 2.75bps at 24bps.
  • Data was mixed, with Empire State manufacturing beating and NAHB sentiment missing - but both reports suggested private sector concern over the growth and inflationary impact of tariffs, with New York State manufacturers expecting increasing price pressures over the next half-year.
  • Foreign holdings of US Treasuries fell by $119.8b in December to $8.51t but were up 7.2% y/y. Japan (-$27.3B to $1.06T), China (-$9.6B to $759B), and the UK (-$44.1B to $722.7B) led the declines. Meanwhile, Belgium (+$13.3B to $374.6B) and the Cayman Islands (+$17.6B to $418.9B) saw increases, Cayman is a popular location for hedge funds
  • Later today we have Housing stars, Building Permits, & FOMC meeting minutes