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US TSYS: Tsys Futures Mixed, Curve Twist-Steepens, CPI Beats

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures closed mixed, with curve twist-steepening following stronger-than-expected US CPI & worst-than-expected Jobless claims with the Fed's Bostic saying the door is open to skipping a rate cut at the next November. The move higher in oil prices also weighed on long-end yields although a solid 30yr auction saw some support further out the curve.
  • TU closed +0-01 at 103-12⅛  while TY closed -0-04 at 112-02+ after making new lows of 111-22 following the data release, however we have seen solid support post the bell into Asia open with the contract trading +05 at 112-07.
  • Cash tsys curve twist-steepened, yields were +2bps to -6.5bps, The 2yr closed -6.4bps at 3.957%, while the 10yr closed -1.2bps at 4.061%. The 2s10s rose 5.2bps to 9.937
  • Initial jobless claims for the six states most heavily impacted by Hurricane Helene saw non-seasonally adjusted claims rise to 35.5k vs closer to the 20k or even a little below that is typical for the time of year.
  • The upside surprise in September CPI (headline 0.18% M/M vs 0.08% expected, Core 0.31% vs 0.25% expected) was driven by multiple factors - which may not be translated into the Fed's preferred PCE gauge, potentially mitigating the upside surprise from a market perspective.
  • Strong 30Y Bond auction reopen traded through: 4.389% high yield vs. 4.405% WI; 2.50x bid-to-cover vs. 2.38x in the prior month. Indirect take-up surged to new all-time high of 80.47% vs. 68.68% prior; direct bidder take-up 7.37% vs. 15.66% prior; primary dealer take-up 12.16% vs. 15.66% prior.
  • Focus turns to PPI and University of Michigan inflation expectations, while earnings also kick off tonight.
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  • Tsys futures closed mixed, with curve twist-steepening following stronger-than-expected US CPI & worst-than-expected Jobless claims with the Fed's Bostic saying the door is open to skipping a rate cut at the next November. The move higher in oil prices also weighed on long-end yields although a solid 30yr auction saw some support further out the curve.
  • TU closed +0-01 at 103-12⅛  while TY closed -0-04 at 112-02+ after making new lows of 111-22 following the data release, however we have seen solid support post the bell into Asia open with the contract trading +05 at 112-07.
  • Cash tsys curve twist-steepened, yields were +2bps to -6.5bps, The 2yr closed -6.4bps at 3.957%, while the 10yr closed -1.2bps at 4.061%. The 2s10s rose 5.2bps to 9.937
  • Initial jobless claims for the six states most heavily impacted by Hurricane Helene saw non-seasonally adjusted claims rise to 35.5k vs closer to the 20k or even a little below that is typical for the time of year.
  • The upside surprise in September CPI (headline 0.18% M/M vs 0.08% expected, Core 0.31% vs 0.25% expected) was driven by multiple factors - which may not be translated into the Fed's preferred PCE gauge, potentially mitigating the upside surprise from a market perspective.
  • Strong 30Y Bond auction reopen traded through: 4.389% high yield vs. 4.405% WI; 2.50x bid-to-cover vs. 2.38x in the prior month. Indirect take-up surged to new all-time high of 80.47% vs. 68.68% prior; direct bidder take-up 7.37% vs. 15.66% prior; primary dealer take-up 12.16% vs. 15.66% prior.
  • Focus turns to PPI and University of Michigan inflation expectations, while earnings also kick off tonight.