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US TSYS: Tsys futures Fall On Hawkish Powell Comments

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures finished the session lower, following comments from Chairman Powell at NABE conference taken hawkishly by markets, where he said central bank will lower interest rates “over time,” while again emphasizing that the overall US economy remains on solid footing, projected rate cut pricing receding as Powell stressed the Fed is not in a hurry to cut rates. There was some earlier weakness in global rates markets following after ECB Pres Lagarde said policymakers are more confident that inflation is being brought under control, and will reflect on that at its October meeting.
  • TU closed -0-06 at 104-03⅞ while TY closed -0-14+ at 114-09, we trade just off this levels in early morning Asia trading.
  • MNI Chicago PMI comes out higher than expected at 46.6 (but still contractionary -- well below 50). The marginal rise was due to two of the five subcomponents improving significantly: Order Backlogs and Employment. Meanwhile, reductions in Supplier Deliveries, New Orders, and Production restricted the upward move.
  • Cash tsys cruves flattened, with the front-end underperforming, yields closed 1-9bps cheaper. The 2yr closed +8.2bps at 3.641%, while 10yr closed +3bps at 3.781%. The 2s10s dropped 5.516 to 13.779.
  • Comments from the Fed's Bostic, where he said he was open to another 50bps at the November meeting if the upcoming data show job growth slowing faster than expected, saw SOFR futures bought
  • Later today we have flash PMI, JOLTS and ISMs and more Fed speak from Bostic, Barkin and Cook. 
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  • Tsys futures finished the session lower, following comments from Chairman Powell at NABE conference taken hawkishly by markets, where he said central bank will lower interest rates “over time,” while again emphasizing that the overall US economy remains on solid footing, projected rate cut pricing receding as Powell stressed the Fed is not in a hurry to cut rates. There was some earlier weakness in global rates markets following after ECB Pres Lagarde said policymakers are more confident that inflation is being brought under control, and will reflect on that at its October meeting.
  • TU closed -0-06 at 104-03⅞ while TY closed -0-14+ at 114-09, we trade just off this levels in early morning Asia trading.
  • MNI Chicago PMI comes out higher than expected at 46.6 (but still contractionary -- well below 50). The marginal rise was due to two of the five subcomponents improving significantly: Order Backlogs and Employment. Meanwhile, reductions in Supplier Deliveries, New Orders, and Production restricted the upward move.
  • Cash tsys cruves flattened, with the front-end underperforming, yields closed 1-9bps cheaper. The 2yr closed +8.2bps at 3.641%, while 10yr closed +3bps at 3.781%. The 2s10s dropped 5.516 to 13.779.
  • Comments from the Fed's Bostic, where he said he was open to another 50bps at the November meeting if the upcoming data show job growth slowing faster than expected, saw SOFR futures bought
  • Later today we have flash PMI, JOLTS and ISMs and more Fed speak from Bostic, Barkin and Cook.