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US TSYS: Large Bear Flattening Extends With 2s10s Tilting Inverted

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries have seen an extension of Friday’s beat flattening pressure in a combination of overseas reaction to the strong payrolls report plus sharp increase in oil futures.
  • Cash yields are 2bp (30s) to 8.8bps (2s) higher, with 2Y yields breaching 4.00% for the first time since Aug 23, currently 4.01%.
  • 2s10s has dropped to -0.2bps (-4.3bp) having been close to 15bp prior to payrolls and seen ytd highs of 24bp earlier in September.
  • It was last more notably inverted prior to the August payrolls report on Sep 6.
  • TYZ4 sits at 112-17+ (- 09+) close to earlier lows  of 112-16+ on heavy volumes of 580k. Recent moves have undermined a prior bullish theme and highlight potential for a continuation lower with support at 112-14+ (38.2% retrace of Apr – Sep bull cycle) before a round 112-00.
  • Data: Consumer credit Aug (1500ET)
  • Fedspeak: Gov. Bowman in banking Q&A (1300ET), Kashkari in Q&A (1350ET), Bostic moderates Q&A (1800ET), Musalem speaks on the economy and policy (1830ET, incl text).
Source: Bloomberg
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  • Treasuries have seen an extension of Friday’s beat flattening pressure in a combination of overseas reaction to the strong payrolls report plus sharp increase in oil futures.
  • Cash yields are 2bp (30s) to 8.8bps (2s) higher, with 2Y yields breaching 4.00% for the first time since Aug 23, currently 4.01%.
  • 2s10s has dropped to -0.2bps (-4.3bp) having been close to 15bp prior to payrolls and seen ytd highs of 24bp earlier in September.
  • It was last more notably inverted prior to the August payrolls report on Sep 6.
  • TYZ4 sits at 112-17+ (- 09+) close to earlier lows  of 112-16+ on heavy volumes of 580k. Recent moves have undermined a prior bullish theme and highlight potential for a continuation lower with support at 112-14+ (38.2% retrace of Apr – Sep bull cycle) before a round 112-00.
  • Data: Consumer credit Aug (1500ET)
  • Fedspeak: Gov. Bowman in banking Q&A (1300ET), Kashkari in Q&A (1350ET), Bostic moderates Q&A (1800ET), Musalem speaks on the economy and policy (1830ET, incl text).
Source: Bloomberg