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US TSYS: Tsys Futures Trade In Narrow Ranges, China & Japan Dump Tsys In Q3

US TSYS
USBulletMarketsFixed Income BulletsNorth America
  • There has been little to mention in US tsys throughout the session, the curve has flattened slightly. Tsys future volumes are below averages. Tsys futures ended Monday at session highs, and while ranges have been tight today, we are trading above yesterday's highs. TU +00⅜ at 102-22, while TY is +02 at 109-22.
  • Cash tsys yields are trading 0.5-1.5bps lower. The 2yr is trading -0.8bps at 4.272%, while the 10yr is trading -1bps at 4.404%, it breached 4.50% briefly on Friday, which now acts as key resistance.
  • Foreign holdings of Tsys rose by $169.5b in September to $8.67t, driven by increases in the UK, Luxembourg, and Belgium, despite declines in Japan and China. Japan and China, two of the largest foreign holders of us tsys, sold significant amounts in Q3, with Japan offloading a record $61.9b whil China sold $51.3b. The selloff was driven by concerns over inflationary policies expected under President-elect Trump, geopolitical risks, and interventions in currency markets. Despite these sales, Japan and China still hold $1.02t and $731b in tsys, respectively.
  • Multiple banks were out with yield forecasts earlier this morning, MS sees the 10yr at 3.75% by mid 2025, GS sees the 10yr at 4.25%-4.30% in 2025 while BofA now sees just 75bps of cuts to come and that the easing cycle will end in June.
  • Projected rate cuts have held steady to start the week vs Friday close (*) : Dec'24 cumulative -14.5bp (-14.5bp), Jan'25 -23.1bp (-23.1bp), Mar'25 -37.7bp (-37.6bp), May'25 -45.9bp (-45.3bp).
  • Building Permits & Housing Starts at 0830ET, BLS releases State-level payrolls and unemployment data for Oct at 1000ET. US Treasury auctions $80B 42D CMBs. Fed speak: KC Fed Schmid economic outlook (text TBA, Q&A) at 1310ET.
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  • There has been little to mention in US tsys throughout the session, the curve has flattened slightly. Tsys future volumes are below averages. Tsys futures ended Monday at session highs, and while ranges have been tight today, we are trading above yesterday's highs. TU +00⅜ at 102-22, while TY is +02 at 109-22.
  • Cash tsys yields are trading 0.5-1.5bps lower. The 2yr is trading -0.8bps at 4.272%, while the 10yr is trading -1bps at 4.404%, it breached 4.50% briefly on Friday, which now acts as key resistance.
  • Foreign holdings of Tsys rose by $169.5b in September to $8.67t, driven by increases in the UK, Luxembourg, and Belgium, despite declines in Japan and China. Japan and China, two of the largest foreign holders of us tsys, sold significant amounts in Q3, with Japan offloading a record $61.9b whil China sold $51.3b. The selloff was driven by concerns over inflationary policies expected under President-elect Trump, geopolitical risks, and interventions in currency markets. Despite these sales, Japan and China still hold $1.02t and $731b in tsys, respectively.
  • Multiple banks were out with yield forecasts earlier this morning, MS sees the 10yr at 3.75% by mid 2025, GS sees the 10yr at 4.25%-4.30% in 2025 while BofA now sees just 75bps of cuts to come and that the easing cycle will end in June.
  • Projected rate cuts have held steady to start the week vs Friday close (*) : Dec'24 cumulative -14.5bp (-14.5bp), Jan'25 -23.1bp (-23.1bp), Mar'25 -37.7bp (-37.6bp), May'25 -45.9bp (-45.3bp).
  • Building Permits & Housing Starts at 0830ET, BLS releases State-level payrolls and unemployment data for Oct at 1000ET. US Treasury auctions $80B 42D CMBs. Fed speak: KC Fed Schmid economic outlook (text TBA, Q&A) at 1310ET.