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US TSYS: Tsys Futures Higher As Oil Falls, Curve Bull-Flattens, Bostic To Speak

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures edged higher on Tuesday, with a sharp drop in oil prices starting late Monday on an apparent de-escalation in Iran-Israel tensions helping TYs trade +0-23 from Monday lows with WTI futures falling 3.83% on Tuesday, while softer-than-expected Canadian CPI and a miss in the latest Empire Manufacturing Survey (albeit offset by stronger details under the hood) also support moves.
  • There was also a very large block buy in Ultra Bond futures, DV01 $1.1m, which supported the moves, while post the bell there has been a TU block buy for DV01 280k.
  • Equities fell after multiple earnings reports globally disappointed (chipmaker ASML, luxury goods' LVMH, UnitedHealth), the Nasdaq was the worst performing, down 1%, while S&P 500 and The Dow both falling 0.75%
  • The risk-off tone in equities helped underpin November Fed rate cut pricing, for which Fed Funds futures extended to a post-Oct 7 high (implying ~98% of a 25bp cut, vs ~88% Monday).
  • Cash tsys curves bull-flattened, with yields closed 1-9bps lower. The 2yr closed -1bps to 3.945%, while the 10yr dropped 6.9bps to 4.032%. The 2s10s closed -5.866 at 8.202.
  • Atlanta Fed Pres Bostic will speak shortly, while later today we have September import/export prices - which feed into the Fed's preferred PCE inflation gauge - and a Fox interview of Vice President Harris.
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  • Tsys futures edged higher on Tuesday, with a sharp drop in oil prices starting late Monday on an apparent de-escalation in Iran-Israel tensions helping TYs trade +0-23 from Monday lows with WTI futures falling 3.83% on Tuesday, while softer-than-expected Canadian CPI and a miss in the latest Empire Manufacturing Survey (albeit offset by stronger details under the hood) also support moves.
  • There was also a very large block buy in Ultra Bond futures, DV01 $1.1m, which supported the moves, while post the bell there has been a TU block buy for DV01 280k.
  • Equities fell after multiple earnings reports globally disappointed (chipmaker ASML, luxury goods' LVMH, UnitedHealth), the Nasdaq was the worst performing, down 1%, while S&P 500 and The Dow both falling 0.75%
  • The risk-off tone in equities helped underpin November Fed rate cut pricing, for which Fed Funds futures extended to a post-Oct 7 high (implying ~98% of a 25bp cut, vs ~88% Monday).
  • Cash tsys curves bull-flattened, with yields closed 1-9bps lower. The 2yr closed -1bps to 3.945%, while the 10yr dropped 6.9bps to 4.032%. The 2s10s closed -5.866 at 8.202.
  • Atlanta Fed Pres Bostic will speak shortly, while later today we have September import/export prices - which feed into the Fed's preferred PCE inflation gauge - and a Fox interview of Vice President Harris.