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US TSYS: Short End Resisting Sell-Off After Dovish ECB Comments Late Tuesday

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries continue to see-saw lower, paring losses at the moment after futures slipped to late July levels overnight. The Dec'24 10Y Treasury futures contract trades 111-07.5 last (-3.5) vs. 111-03.5 low, round number technical support of 111-00 is also the July 22 low.
  • Trading desks continue to cite increased odds of a Trump election win (underpinning inflation concerns) for the pressure in rates. However, dovish comments from ECB governing council member Villeroy late Tuesday has stemmed a rise in short end yields.
  • If inflation is "sustainably at 2%" next year, and with still a sluggish growth outlook in Europe, there won’t be any reasons for our monetary policy to remain restrictive, and for our rates to be above the neutral rate of interest", Villeroy said in New York.
  • Short end rates bounced off lows late Tuesday, helping rekindle projected US rate cuts that are holding steady this morning: Nov'24 cumulative -23.0bp, Dec'24 -41.1bp, Jan'25 -58.6bp.
  • Incoming data includes MBA Mortgage Applications at 0700ET, followed by Existing Home Sales at 1000ET and the Federal Reserve Beige Book release at 1400ET. Treasury supply sees $13B 20Y Bond auction re-open at 1300ET.
  • Scheduled Fed speakers: Philly Fed Bowman making opening remarks at a fintech conference 0900ET, Richmond Fed Barkin community college conference at 1200ET.
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  • Treasuries continue to see-saw lower, paring losses at the moment after futures slipped to late July levels overnight. The Dec'24 10Y Treasury futures contract trades 111-07.5 last (-3.5) vs. 111-03.5 low, round number technical support of 111-00 is also the July 22 low.
  • Trading desks continue to cite increased odds of a Trump election win (underpinning inflation concerns) for the pressure in rates. However, dovish comments from ECB governing council member Villeroy late Tuesday has stemmed a rise in short end yields.
  • If inflation is "sustainably at 2%" next year, and with still a sluggish growth outlook in Europe, there won’t be any reasons for our monetary policy to remain restrictive, and for our rates to be above the neutral rate of interest", Villeroy said in New York.
  • Short end rates bounced off lows late Tuesday, helping rekindle projected US rate cuts that are holding steady this morning: Nov'24 cumulative -23.0bp, Dec'24 -41.1bp, Jan'25 -58.6bp.
  • Incoming data includes MBA Mortgage Applications at 0700ET, followed by Existing Home Sales at 1000ET and the Federal Reserve Beige Book release at 1400ET. Treasury supply sees $13B 20Y Bond auction re-open at 1300ET.
  • Scheduled Fed speakers: Philly Fed Bowman making opening remarks at a fintech conference 0900ET, Richmond Fed Barkin community college conference at 1200ET.