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US TSYS: Tsys Futures Fall, Close At Session Lows, Curve Steepens

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures continued to sell-off post NY close although trade just off lows right now. There was a decent sell-of in treasuries overnight, initially taking the lead from ECBs, while higher oil prices also weighed on yields, there was a large downside buyers tsys puts throughout the session which has added to pressure on yields.
  • Cash tsys yields rose 8-11.5bps, as the curve steepened. The 2yr yield closed +8.3bps at 4.032%, while the 10yr closed +11.3bps at 4.196%. The 2s10s saw the largest steepening, jumping 2.933bps to 16.177.
  • There was little in the way of economic data overnight, with focus this week turning to corporate earnings with the first major companies reporting later today.
  • There was also no reaction to the Fed's  Kashkari townhall event, says rates will surge if the U.S. deficit "goes to the moon", said tariffs are hard to analyze if they fall into a "vicious cycle".
  • While earlier this morning, the Fed's Jeff Schmid advocated for smaller, gradual rate adjustments to allow time for assessing the economy's response, emphasizing a cautious approach to avoid market volatility. He believes interest rates may need to settle above pre-pandemic levels, with continued focus on balancing inflation control and economic growth.
  • Projected rate cuts recede vs. Monday morning's levels (*): Nov'24 cumulative -22.3bp (-23.0bp), Dec'24 -40.1bp (-42.7bp), Jan'25 -57.6bp (-60.1bp)
  • There is no meaningful economic data, focus on home sales flash PMIs, weekly claims, durables and UofM sentiment later this week.
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  • Tsys futures continued to sell-off post NY close although trade just off lows right now. There was a decent sell-of in treasuries overnight, initially taking the lead from ECBs, while higher oil prices also weighed on yields, there was a large downside buyers tsys puts throughout the session which has added to pressure on yields.
  • Cash tsys yields rose 8-11.5bps, as the curve steepened. The 2yr yield closed +8.3bps at 4.032%, while the 10yr closed +11.3bps at 4.196%. The 2s10s saw the largest steepening, jumping 2.933bps to 16.177.
  • There was little in the way of economic data overnight, with focus this week turning to corporate earnings with the first major companies reporting later today.
  • There was also no reaction to the Fed's  Kashkari townhall event, says rates will surge if the U.S. deficit "goes to the moon", said tariffs are hard to analyze if they fall into a "vicious cycle".
  • While earlier this morning, the Fed's Jeff Schmid advocated for smaller, gradual rate adjustments to allow time for assessing the economy's response, emphasizing a cautious approach to avoid market volatility. He believes interest rates may need to settle above pre-pandemic levels, with continued focus on balancing inflation control and economic growth.
  • Projected rate cuts recede vs. Monday morning's levels (*): Nov'24 cumulative -22.3bp (-23.0bp), Dec'24 -40.1bp (-42.7bp), Jan'25 -57.6bp (-60.1bp)
  • There is no meaningful economic data, focus on home sales flash PMIs, weekly claims, durables and UofM sentiment later this week.