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US TSYS: Tsys Futures Slightly Weaker, Curve Steepens Ahead Of CPI & 30y Auction

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures are slightly weaker today although have traded in tight ranges, the long-end has underperformed ahead of the 30y auction and CPI later today. TU is unch at 103-11⅛, while TY is trading -02+ at 112-04 just off session lows.
  • Volumes are down on prior sessions, while only trade of note has been a TU/FV Block steepener $190k DV01.
  • A bear threat in tsys remains present with Dec'24 10y trading at its recent lows. The latest sell-off has resulted in a break of the 100-day EMA and now trades just above key support & 200-day EMA at 112-00, while a move back above 113-12 (Sep 3 lows) is key resistance.
  • Cash tsys curve has twist-steepened throughout the session, with yields +0.5bps to -1bps. The 2yr is trading -1bps at 4.012%, while the 10yr is +0.2bps at 4.075% with the 2s10s rising 1.181bps to 5.865.
  • The Fed's Daly earlier highlighted that the aggressive 50bp rate cut in September was a necessary "recalibration" rather than an indication of future cuts. She mentioned that the Fed could make one or two more rate cuts by the end of the year, depending on economic conditions. Daly emphasized that the September cut was designed to align policy rates with the economy's needs, avoiding overtightening, which could harm the labor market. She expressed confidence in achieving the Fed’s 2% inflation target
  • Fed funds futures are little changed today, with 21.4bps for November, and 46.6bps of cuts priced by the December meeting. The market has a total of 135bps of cuts priced in through to October 2025
  • Looking ahead focus will turn to CPI which is expected to ease modestly in September from the 0.33% in August, with seven analysts eyeing an average 0.27% M/M from a range of 0.20-0.34. We also have Jobless claims, 30y Bond Auction and more fed speakers to come.
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  • Tsys futures are slightly weaker today although have traded in tight ranges, the long-end has underperformed ahead of the 30y auction and CPI later today. TU is unch at 103-11⅛, while TY is trading -02+ at 112-04 just off session lows.
  • Volumes are down on prior sessions, while only trade of note has been a TU/FV Block steepener $190k DV01.
  • A bear threat in tsys remains present with Dec'24 10y trading at its recent lows. The latest sell-off has resulted in a break of the 100-day EMA and now trades just above key support & 200-day EMA at 112-00, while a move back above 113-12 (Sep 3 lows) is key resistance.
  • Cash tsys curve has twist-steepened throughout the session, with yields +0.5bps to -1bps. The 2yr is trading -1bps at 4.012%, while the 10yr is +0.2bps at 4.075% with the 2s10s rising 1.181bps to 5.865.
  • The Fed's Daly earlier highlighted that the aggressive 50bp rate cut in September was a necessary "recalibration" rather than an indication of future cuts. She mentioned that the Fed could make one or two more rate cuts by the end of the year, depending on economic conditions. Daly emphasized that the September cut was designed to align policy rates with the economy's needs, avoiding overtightening, which could harm the labor market. She expressed confidence in achieving the Fed’s 2% inflation target
  • Fed funds futures are little changed today, with 21.4bps for November, and 46.6bps of cuts priced by the December meeting. The market has a total of 135bps of cuts priced in through to October 2025
  • Looking ahead focus will turn to CPI which is expected to ease modestly in September from the 0.33% in August, with seven analysts eyeing an average 0.27% M/M from a range of 0.20-0.34. We also have Jobless claims, 30y Bond Auction and more fed speakers to come.