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US TSYS: Tsys Futures Steady Ahead Of Retail Sales

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Not too much to mention for tsys during Asia today, the curve has steepened slightly, with the 2s10s roughly +1bps at 22.632. Volumes in tsys futures are well below recent averages, TU is +00⅜ at 102-21⅝, the only contract in the green, while TY is -01+ at 108-29+
  • The 10yr is unchanged  at 4.529%, the 10yr has slightly out-performed the 5-30yrs part of the curve over the past week. BBG have reported that MLIV survey participants expect the 10yr to rise to 4.80% over the coming 6 months, the 10yr last reached this level in early Jan.
  • January retail sales are expected to soften due to harsh weather that dampened vehicle sales and shopping activity, despite strong labor market and inflation data. Headline retail sales are expected to have fallen 0.4%, while core sales (excluding autos and gas) likely to have risen 0.2%. Rebuilding efforts from natural disasters may have boosted sales of building materials, though small-business data and consumer sentiment suggest downside risks. Despite this, robust Q4 consumer spending—driven by higher wages and front-running of tariff hikes—is expected to continue supporting demand, particularly for durable goods.
  • • Projected rate cuts through mid-2025 steady to slightly firmer vs. Thursday (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -3.9bp, Jun'25 at -11.1bp (-9.8bp), Jul'25 at -15.1bp (-13.6bp).
  • The market is still pricing in the first rate cut in October, after briefly pushing out the first cut expectation to December following CPI on Wednesday, note there is no meeting in November
  • Focus now turns to Retail Sales later tonight, followed by Industrial Production later in the session
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  • Not too much to mention for tsys during Asia today, the curve has steepened slightly, with the 2s10s roughly +1bps at 22.632. Volumes in tsys futures are well below recent averages, TU is +00⅜ at 102-21⅝, the only contract in the green, while TY is -01+ at 108-29+
  • The 10yr is unchanged  at 4.529%, the 10yr has slightly out-performed the 5-30yrs part of the curve over the past week. BBG have reported that MLIV survey participants expect the 10yr to rise to 4.80% over the coming 6 months, the 10yr last reached this level in early Jan.
  • January retail sales are expected to soften due to harsh weather that dampened vehicle sales and shopping activity, despite strong labor market and inflation data. Headline retail sales are expected to have fallen 0.4%, while core sales (excluding autos and gas) likely to have risen 0.2%. Rebuilding efforts from natural disasters may have boosted sales of building materials, though small-business data and consumer sentiment suggest downside risks. Despite this, robust Q4 consumer spending—driven by higher wages and front-running of tariff hikes—is expected to continue supporting demand, particularly for durable goods.
  • • Projected rate cuts through mid-2025 steady to slightly firmer vs. Thursday (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -3.9bp, Jun'25 at -11.1bp (-9.8bp), Jul'25 at -15.1bp (-13.6bp).
  • The market is still pricing in the first rate cut in October, after briefly pushing out the first cut expectation to December following CPI on Wednesday, note there is no meeting in November
  • Focus now turns to Retail Sales later tonight, followed by Industrial Production later in the session