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US TSYS: Tsys Futures Rally On Bessent Pick, Easing Geopol Tensions

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • Tsys futures rallied on Monday following new that Scott Bessent is nominated for Treasury Secretary, while oil fell on the back of middle east potential ceasefire, while a strong 2y bond auction also supported the market, a large block trading towards the end of the US session was also supportive. TU closed +0-05¼ at 102-22⅛, while TY closed +0-28+ at 110-17, and broke through resistance.
  • Cash tsys curves bull-flattened, with the 2s10s has inverted again closing -2.25bps at -0.178. Yields closed 10-12.5bps lower, with the 2yr -10.4bps at 4.269%, while the 10yr closed -12.6bps at 4.273%
  • Minneapolis Fed President Neel Kashkari considers a 25bps rate cut in December as a reasonable debate, while noting the economy's resilience may reflect a higher neutral rate. He highlighted the need to assess inflation trends and the impact of monetary policy, with upcoming data influencing the Fed's decision.
  • Demand for Treasury’s 3m bills outpaced 6m bills in Monday’s auctions, reflecting investor preference for shorter durations amid fiscal policy uncertainties under the incoming Trump administration. The 3m auction saw strong indirect bidder participation (62.3%), the highest since late October, while the 6m auction lagged with its lowest indirect bid share since mid-November (57.1%).
  • Fed Funds implied rates are little changed for the near-term but the broader rally increasingly weighs further out into 2025 (the Dec rate is -0.5bp since Fri vs -4.5bp for the Jun’25). It leaves 13bp of cuts for Dec before a cumulative 19bp for Jan and 52bp for June.
  • Later today we have  New Home sales, Conf. Board Consumer Confidence followed by FOMC minutes (MNI Preview here), there will also be a string of Fed speakers ahead of a shortened Thanksgiving week.
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  • Tsys futures rallied on Monday following new that Scott Bessent is nominated for Treasury Secretary, while oil fell on the back of middle east potential ceasefire, while a strong 2y bond auction also supported the market, a large block trading towards the end of the US session was also supportive. TU closed +0-05¼ at 102-22⅛, while TY closed +0-28+ at 110-17, and broke through resistance.
  • Cash tsys curves bull-flattened, with the 2s10s has inverted again closing -2.25bps at -0.178. Yields closed 10-12.5bps lower, with the 2yr -10.4bps at 4.269%, while the 10yr closed -12.6bps at 4.273%
  • Minneapolis Fed President Neel Kashkari considers a 25bps rate cut in December as a reasonable debate, while noting the economy's resilience may reflect a higher neutral rate. He highlighted the need to assess inflation trends and the impact of monetary policy, with upcoming data influencing the Fed's decision.
  • Demand for Treasury’s 3m bills outpaced 6m bills in Monday’s auctions, reflecting investor preference for shorter durations amid fiscal policy uncertainties under the incoming Trump administration. The 3m auction saw strong indirect bidder participation (62.3%), the highest since late October, while the 6m auction lagged with its lowest indirect bid share since mid-November (57.1%).
  • Fed Funds implied rates are little changed for the near-term but the broader rally increasingly weighs further out into 2025 (the Dec rate is -0.5bp since Fri vs -4.5bp for the Jun’25). It leaves 13bp of cuts for Dec before a cumulative 19bp for Jan and 52bp for June.
  • Later today we have  New Home sales, Conf. Board Consumer Confidence followed by FOMC minutes (MNI Preview here), there will also be a string of Fed speakers ahead of a shortened Thanksgiving week.