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US TSYS: Tsys Yields Finish Off Session Lows, Curve Continues To Flatten

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys curve bull-flattened on Tuesday driven by US President Trump’s comments on tariffs and a steep drop in oil prices. Gains were pared slightly during a rangebound US session with below-average Treasury futures volume. In options, flows were skewed toward targeting higher yields over the coming weeks.
  • Tsys futures closed mixed, with TU down 00¼ at 102-23¼, while TY closed +06 at 108-23+
  • Cash tsys closed flat to 5bps lower, giving back about half of the session earlier gains. The 2yr closed -0.8bps at 4.274%, while the 10yr is trading -5.1bps. The 2s10s fell 4bps to 30bps, now 12bps of its recent highs.
  • The 2025 Fed rate cut expectations fairly static. Projected rate cuts through mid-2025 this morning, current lvls vs. Friday close* as follows: Jan'25 steady at -0.01bp, Mar'25 at -6.6bp (-7.5bp), May'25 -12.4bp (-12.9bp), Jun'25 -22.3bp (-21.8bp), Jul'25 at -26.1bp (-25.6bp).
  • January Philly Fed non-manufacturing survey was soft, and coming out alongside a below-expected Canadian CPI figure, it helped a nascent morning bid for Treasuries.
  • Wednesday's data calendar remains light, with MBA mortgage data and the December Leading Index.
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  • Tsys curve bull-flattened on Tuesday driven by US President Trump’s comments on tariffs and a steep drop in oil prices. Gains were pared slightly during a rangebound US session with below-average Treasury futures volume. In options, flows were skewed toward targeting higher yields over the coming weeks.
  • Tsys futures closed mixed, with TU down 00¼ at 102-23¼, while TY closed +06 at 108-23+
  • Cash tsys closed flat to 5bps lower, giving back about half of the session earlier gains. The 2yr closed -0.8bps at 4.274%, while the 10yr is trading -5.1bps. The 2s10s fell 4bps to 30bps, now 12bps of its recent highs.
  • The 2025 Fed rate cut expectations fairly static. Projected rate cuts through mid-2025 this morning, current lvls vs. Friday close* as follows: Jan'25 steady at -0.01bp, Mar'25 at -6.6bp (-7.5bp), May'25 -12.4bp (-12.9bp), Jun'25 -22.3bp (-21.8bp), Jul'25 at -26.1bp (-25.6bp).
  • January Philly Fed non-manufacturing survey was soft, and coming out alongside a below-expected Canadian CPI figure, it helped a nascent morning bid for Treasuries.
  • Wednesday's data calendar remains light, with MBA mortgage data and the December Leading Index.