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US TSYS: Yesterday’s Recovery Rally Unwinds, Curves Steepen To Fresh ’24 Highs

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America

Tsys lower during pre-NY hours as a Chinese monetary easing package weighed on bonds, while driving a rally in equities and oil.

  • The latest round of Chinese policymaker support aims to stimulate domestic demand and promote the achievement of the country’s annual growth target.
  • Much of Monday’s second-half rally (driven by heightened risk surrounding Israel & Lebanon) has been unwound.
  • TY last -0-10+ at 114-14, 0-01+ off lows.
  • Yesterday’s base (114-11+) protects the Sep 4 low (114-00+).
  • Bulls need to retake the Sep 19 high (115-02+) to start to reassert their control.
  • Yields 1-5bp higher, curve bear steepens.
  • 2s10s hit a fresh cycle high at 19.2bp, 5s30s did the same, printing 60.6bp.
  • On the data front, regional Fed activity indicators and various house price indices will be released today.
  • We will get comments from hawkish Fed dissenter Bowman, although we don’t think we will get much new there, as the detailed explanation of her dissent has already been provided.
  • $69bln of 2-Year Tsy supply will also have to be digested.
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Tsys lower during pre-NY hours as a Chinese monetary easing package weighed on bonds, while driving a rally in equities and oil.

  • The latest round of Chinese policymaker support aims to stimulate domestic demand and promote the achievement of the country’s annual growth target.
  • Much of Monday’s second-half rally (driven by heightened risk surrounding Israel & Lebanon) has been unwound.
  • TY last -0-10+ at 114-14, 0-01+ off lows.
  • Yesterday’s base (114-11+) protects the Sep 4 low (114-00+).
  • Bulls need to retake the Sep 19 high (115-02+) to start to reassert their control.
  • Yields 1-5bp higher, curve bear steepens.
  • 2s10s hit a fresh cycle high at 19.2bp, 5s30s did the same, printing 60.6bp.
  • On the data front, regional Fed activity indicators and various house price indices will be released today.
  • We will get comments from hawkish Fed dissenter Bowman, although we don’t think we will get much new there, as the detailed explanation of her dissent has already been provided.
  • $69bln of 2-Year Tsy supply will also have to be digested.