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US TSYS: Tsy Ylds Resume Climb; Fed Beige Book: Little Change Economic Activity

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Treasuries remained weaker but off second half lows after the bell, curves flatter as projected rate cuts retreated slightly from this morning's levels (*): Nov'24 cumulative -22.3bp (-23.0bp), Dec'24 -41.0bp (-41.4bp), Jan'25 -57.1bp (-57.6bp).
  • The Dec'24 10Y contract breached round number support of 111-00 earlier to 110-30.5 low, currently trades 111-02.5 (-8.5), 2s10s curve -1.538 at 15.770 while the 5s30s curve sits 2.849 flatter at 45.980. Next support at 110-13 61.8% retracement of the Apr - Sep bull cycle (cont).
  • Muted reaction to the $13B 20Y bond auction reopen (912810UD8) tailing again: 4.590% high yield vs. 4.574% WI; 2.59x bid-to-cover vs. prior month's 2.51x (lowest since May).
  • The Federal Reserve's Beige Book showed little change in economic activity, "inflation continued to moderate with selling prices reportedly increasing at a slight or modest pace in most districts."
  • Treasury's quarterly Refunding process begins next Monday Oct 28 with the release of the financing estimates for the current quarter (we refer to this as the November refunding round). Broad consensus is that the next upsizing will not come until late 2025 or even early 2026 though of course much will depend on the fiscal path taken in the next administration/Congress.
  • Focus turns to Thursday's weekly jobless claims, flash PMIs, New Home Sales, regional Fed data from Chicago and Kansas City.
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  • Treasuries remained weaker but off second half lows after the bell, curves flatter as projected rate cuts retreated slightly from this morning's levels (*): Nov'24 cumulative -22.3bp (-23.0bp), Dec'24 -41.0bp (-41.4bp), Jan'25 -57.1bp (-57.6bp).
  • The Dec'24 10Y contract breached round number support of 111-00 earlier to 110-30.5 low, currently trades 111-02.5 (-8.5), 2s10s curve -1.538 at 15.770 while the 5s30s curve sits 2.849 flatter at 45.980. Next support at 110-13 61.8% retracement of the Apr - Sep bull cycle (cont).
  • Muted reaction to the $13B 20Y bond auction reopen (912810UD8) tailing again: 4.590% high yield vs. 4.574% WI; 2.59x bid-to-cover vs. prior month's 2.51x (lowest since May).
  • The Federal Reserve's Beige Book showed little change in economic activity, "inflation continued to moderate with selling prices reportedly increasing at a slight or modest pace in most districts."
  • Treasury's quarterly Refunding process begins next Monday Oct 28 with the release of the financing estimates for the current quarter (we refer to this as the November refunding round). Broad consensus is that the next upsizing will not come until late 2025 or even early 2026 though of course much will depend on the fiscal path taken in the next administration/Congress.
  • Focus turns to Thursday's weekly jobless claims, flash PMIs, New Home Sales, regional Fed data from Chicago and Kansas City.