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US TSYS: Modest Bear Flattening As We Await A Treasury Secretary Nominee

US TSYS
USBulletMarketsFixed Income BulletsNorth America

Treasuries weakened modestly Thursday with modest bear flattening in the cash curve.

  • Futures gained overnight on renewed geopolitical tensions as Russia reportedly used an experimental ICBM. They would recede slightly but hit session highs of 109-28+ in mid-morning once the major data was out of the way.
  • From there, Treasuries faded, as the missile episode was talked down by US officials, and equities hit the week's best levels following Wednesday's NVidia earnings beat.
  • We await further developments after reports that president-elect Trump had selected a Treasury Secretary nominee - hedge fund manager Scott Bessent is again the favorite to take the nomination per betting markets as we publish this.
  • Volumes were notably elevated (3.4M TYZ4) , but that's due to the quarterly roll ahead of the Thanksgiving holidays.
  • Data did not have a lasting impact: solid initial jobless claims (for payrolls reference week) offset weakness in continuing claims, existing home sales remained subdued as expected, and regional Fed manufacturing surveys (Philly, KC) offered mixed indications on current activity.
  • Likewise, the multiple Fed speakers brought little new insight on the rates front, including an overnight interview with NY's Williams and, disappointingly, Cleveland Fed's Hammack who had no commentary on current monetary policy.
  • Latest levels: the 2-Yr yield is up 2.8bps at 4.3423%, 5-Yr is up 1.6bps at 4.2946%, 10-Yr is up 0.8bps at 4.4178%, and 30-Yr is up 0.9bps at 4.6063%.
  • Friday's docket is highlighted by preliminary PMIs for November, with the final November UMichigan survey also of note - the only Fed speaker scheduled is Gov Bowman after hours, but we've already heard from her this week.
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Treasuries weakened modestly Thursday with modest bear flattening in the cash curve.

  • Futures gained overnight on renewed geopolitical tensions as Russia reportedly used an experimental ICBM. They would recede slightly but hit session highs of 109-28+ in mid-morning once the major data was out of the way.
  • From there, Treasuries faded, as the missile episode was talked down by US officials, and equities hit the week's best levels following Wednesday's NVidia earnings beat.
  • We await further developments after reports that president-elect Trump had selected a Treasury Secretary nominee - hedge fund manager Scott Bessent is again the favorite to take the nomination per betting markets as we publish this.
  • Volumes were notably elevated (3.4M TYZ4) , but that's due to the quarterly roll ahead of the Thanksgiving holidays.
  • Data did not have a lasting impact: solid initial jobless claims (for payrolls reference week) offset weakness in continuing claims, existing home sales remained subdued as expected, and regional Fed manufacturing surveys (Philly, KC) offered mixed indications on current activity.
  • Likewise, the multiple Fed speakers brought little new insight on the rates front, including an overnight interview with NY's Williams and, disappointingly, Cleveland Fed's Hammack who had no commentary on current monetary policy.
  • Latest levels: the 2-Yr yield is up 2.8bps at 4.3423%, 5-Yr is up 1.6bps at 4.2946%, 10-Yr is up 0.8bps at 4.4178%, and 30-Yr is up 0.9bps at 4.6063%.
  • Friday's docket is highlighted by preliminary PMIs for November, with the final November UMichigan survey also of note - the only Fed speaker scheduled is Gov Bowman after hours, but we've already heard from her this week.