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US TSYS: Tsys Futures Little Changed, Curve Steeper As 2yr Trades At 3.592%

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • It has been a very slow session, ranges have been tight while volume as well below recent averages. The short-end has performed slightly better with TU -00+ at 104-11⅛ up from earlier lows of 104-10⅜, while TY is - 00+ at 115-11+.
  • The bullish theme remains with TY contract holding on to its latest gains. The push higher mid last week has resulted in a print above key resistance and the bull trigger at 115-19, the Aug 5 high. The move higher confirms a resumption of the uptrend and paves the way for a climb towards the 116.00 handle. Moving average studies remain in a bull-mode position, highlighting a clear medium-term uptrend. Firm support is seen at 114-23+, the 20-day EMA.
  • Cash tsys are trading about 0.5-1.5bps lower, the 2yr continues to outperform head of tonight's FOMC meeting trading 1.3bps at 3.592% vs cycle lows of 3.523%.
  • Investors are increasingly betting on a larger-than-expected half-point interest rate cut at this week’s Federal Reserve meeting, with activity in October fed funds futures reaching record levels since the contract's inception in 1988. Odds of a 50bps cut have increased recently with commentary from ex-Fed Pres Dudley following articles from WSJ & FT which leaned slightly dovish.
  • Projected rate hikes through year end gain slightly vs. late Tuesday levels (*): Sep'24 cumulative -42.3bp (-41.5bp), Nov'24 cumulative -78.2bp (-78.0bp), Dec'24 -117.0bp (-116.5bp).
  • Focus will turn to FOMC announcement includes the Summary of Economic projections later today.
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  • It has been a very slow session, ranges have been tight while volume as well below recent averages. The short-end has performed slightly better with TU -00+ at 104-11⅛ up from earlier lows of 104-10⅜, while TY is - 00+ at 115-11+.
  • The bullish theme remains with TY contract holding on to its latest gains. The push higher mid last week has resulted in a print above key resistance and the bull trigger at 115-19, the Aug 5 high. The move higher confirms a resumption of the uptrend and paves the way for a climb towards the 116.00 handle. Moving average studies remain in a bull-mode position, highlighting a clear medium-term uptrend. Firm support is seen at 114-23+, the 20-day EMA.
  • Cash tsys are trading about 0.5-1.5bps lower, the 2yr continues to outperform head of tonight's FOMC meeting trading 1.3bps at 3.592% vs cycle lows of 3.523%.
  • Investors are increasingly betting on a larger-than-expected half-point interest rate cut at this week’s Federal Reserve meeting, with activity in October fed funds futures reaching record levels since the contract's inception in 1988. Odds of a 50bps cut have increased recently with commentary from ex-Fed Pres Dudley following articles from WSJ & FT which leaned slightly dovish.
  • Projected rate hikes through year end gain slightly vs. late Tuesday levels (*): Sep'24 cumulative -42.3bp (-41.5bp), Nov'24 cumulative -78.2bp (-78.0bp), Dec'24 -117.0bp (-116.5bp).
  • Focus will turn to FOMC announcement includes the Summary of Economic projections later today.