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US TSYS: Tsys Little Changed, 2yr Yield Hovering Near Cycle Lows

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America
  • Tsys futures are little changed this morning, TU is + 01+ at 114-23+ near the early session lows ranges have been tight.
  • Headlines have been rather quiet this morning, Hong Kong listed equities are surging higher again, while China is out for Golden week, Vance & Walz are currently debating however there have been few headlines out from it.
  • Dec'24 10y futures are in consolidation mode and continue to trade closer to their recent lows. The move down that started on Sep 11, still appears to be a correction. The contract has traded through the 20-day EMA, at 114-21+. A clear break of this EMA would signal scope for a deeper retracement, towards 113-30, the 50-day EMA. For bulls, a resumption of gains would refocus attention on 115-24+, the Sep 11 high and a bull trigger.
  • Cash tsys curve is unchanged today, with the 2yr at 3.604% just off recent lows of 3.54%, while the 10yr is trading at 3.733%.
  • Traders are reducing their bets on a further rally in US Treasuries, scaling back expectations of a half-point rate cut by the Fed in November. This unwind is ahead of the September jobs report out on Friday and follows comments from Powell suggesting a gradual approach to rate cuts.
  • The swaps market now prices in reduced odds for a large November rate cut, favoring two smaller quarter-point reductions for the rest of the year. Hedge funds and asset managers remain net long on SOFR contracts, but recent activity shows increased demand for hedging against higher rates. 
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  • Tsys futures are little changed this morning, TU is + 01+ at 114-23+ near the early session lows ranges have been tight.
  • Headlines have been rather quiet this morning, Hong Kong listed equities are surging higher again, while China is out for Golden week, Vance & Walz are currently debating however there have been few headlines out from it.
  • Dec'24 10y futures are in consolidation mode and continue to trade closer to their recent lows. The move down that started on Sep 11, still appears to be a correction. The contract has traded through the 20-day EMA, at 114-21+. A clear break of this EMA would signal scope for a deeper retracement, towards 113-30, the 50-day EMA. For bulls, a resumption of gains would refocus attention on 115-24+, the Sep 11 high and a bull trigger.
  • Cash tsys curve is unchanged today, with the 2yr at 3.604% just off recent lows of 3.54%, while the 10yr is trading at 3.733%.
  • Traders are reducing their bets on a further rally in US Treasuries, scaling back expectations of a half-point rate cut by the Fed in November. This unwind is ahead of the September jobs report out on Friday and follows comments from Powell suggesting a gradual approach to rate cuts.
  • The swaps market now prices in reduced odds for a large November rate cut, favoring two smaller quarter-point reductions for the rest of the year. Hedge funds and asset managers remain net long on SOFR contracts, but recent activity shows increased demand for hedging against higher rates.