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US TSYS: Tsys Futures Edge Higher, Curve Steepens, Fed Speakers

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures have ticked higher throughout the session with the front-end outperforming. There has been multiple Fed speakers through the session, while multiple block steepener trades have also occurred throughout the day which has supported the move. TU is +03⅛ at 103-15⅝, while TY is trading +06+ at 112-22
  • The cash tsys curve has bull-steepened with the 2yr yield -4.3bps at 3.952%, while the 10yr is -2.3bps at 4.002%. The 2s10s has crept slightly off session highs of 5.856 to trade +2.040 at 4.869 now
  • In August, Japanese investors made a record purchase of ¥5.59t in US tsys, as shown by the latest balance-of-payments data from Japan's Ministry of Finance.
  • The Fed's Musalem supported the decision last month to cut interest rates by 50bps but prefers future reductions to be gradual. He emphasized the need for caution, noting that easing too much too soon carries more risk than easing too little. Musalem expects inflation to converge to the Fed’s 2% target over the next few quarters and supports further gradual rate cuts.
  • The Fed's Williams expressed confidence that the US central bank is "well positioned" to achieve a soft landing for the economy. He believes current monetary policy supports both economic and labor market strength while guiding inflation toward the 2% target.
  • Fed funds futures are steady this morning, with Nov futures pricing in 22bps of cuts, and 50.4bps of cuts now priced in by the December meeting.
  • Today we have Trade Balance while focus will turn to Wednesday's minutes for the September FOMC, CPI on Thursday and PPI Friday
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  • Tsys futures have ticked higher throughout the session with the front-end outperforming. There has been multiple Fed speakers through the session, while multiple block steepener trades have also occurred throughout the day which has supported the move. TU is +03⅛ at 103-15⅝, while TY is trading +06+ at 112-22
  • The cash tsys curve has bull-steepened with the 2yr yield -4.3bps at 3.952%, while the 10yr is -2.3bps at 4.002%. The 2s10s has crept slightly off session highs of 5.856 to trade +2.040 at 4.869 now
  • In August, Japanese investors made a record purchase of ¥5.59t in US tsys, as shown by the latest balance-of-payments data from Japan's Ministry of Finance.
  • The Fed's Musalem supported the decision last month to cut interest rates by 50bps but prefers future reductions to be gradual. He emphasized the need for caution, noting that easing too much too soon carries more risk than easing too little. Musalem expects inflation to converge to the Fed’s 2% target over the next few quarters and supports further gradual rate cuts.
  • The Fed's Williams expressed confidence that the US central bank is "well positioned" to achieve a soft landing for the economy. He believes current monetary policy supports both economic and labor market strength while guiding inflation toward the 2% target.
  • Fed funds futures are steady this morning, with Nov futures pricing in 22bps of cuts, and 50.4bps of cuts now priced in by the December meeting.
  • Today we have Trade Balance while focus will turn to Wednesday's minutes for the September FOMC, CPI on Thursday and PPI Friday