Overweight USTs Now; Watch QRA for Future Issuances
USTs have tracked their seasonal bias closely this year. Now is a favorable time to go overweight, window is from late April to early May. QRA next week is my big concern in case Treasury projects larger coupon issuance later this year. https://t.co/aBAEgpiTmr
Coupon UST Auctions Surge Ahead as Front‑End Pressure Eases
With FOMC on Wed, coupon UST auctions pulled ahead with double trouble today (2s and 5s). A bit of front-end pressure overnight that seems to be easing. Should go well with Warsh's nomination back on track
2‑Year Yield Leads Curve Steepening After DOJ News
No great surprise that the curve steepened on the DOJ news. 2y the king here outpacing the belly with even 2s5s a touch steeper
Monday Double Front-End Auctions Pressure
King Lear's Truth Social musings may be obscuring it a bit, but double front-end auctions on Monday weighing on 2s and 5s
Iran War Inflation Drives Rates Despite Upcoming UST Auction Schedule
It has been almost two weeks since the last UST coupon auction. Today's 20y starts up a bunched up schedule in the next week that is another headwind for rates. Of course, the Iran war inflation remains the...
Long-End Traders Market Holds Tight
Long end has been a traders market since the initial sell-off after the Iran war started. Ultras (UB) with a relatively clean 1 point (ish) range that continues to hold https://t.co/PQ1Ar1xzTA
Warsh's Plan to Cut SOMA WAM Gains FOMC Backing
Reducing WAM of SOMA could be part of Warsh's plan which many FOMC members could support
Republicans Brace for Hawkish Warsh Amid Trump Nomination
Feels like Ts are bracing for a hawkish Warsh which makes sense given he is Trump's nominee and he has to show his independence during the hearings
Warsh Vows Strict Rate Independence, Reaffirms Price‑Stability Mandate
Warsh commits to being strictly independent on rates Also Warsh: price stability Fed mandate without excuse
Warsh Hearing Could Shift USTs Amid Iran War
Iran war continues to dominate price action in USTs but Warsh's confirmation hearing tomorrow will likely interrupt the current narrative for a spell especially if he sticks to his recent rate dovishness and balance sheet hawkishness.
War's End Relieves Treasury Funding, Swap Spreads Expand
With the possibility of war ending, US Treasury funding pressure looks to be easing helping swap spreads widen. Nice move today https://t.co/q4hDJXSsiz
UST 5s30s Struggles Above 100bps, Steepeners Fade
UST 5s30s having trouble holding above 100 bps which makes sense. It has been a nice ride for steepeners the past few weeks so a nice round number spot to lean against 5s here https://t.co/Z59ZwWo3hI
5‑Year Yields Rich Amid Front‑End
After a spirited front-end rally, 5s looking rich on the curve as intermediate-term slowdown bets dominate. Unfortunately, other tenors have their own issues. Fiscal concerns make the long end unattractive before May refunding and 2s have a here...
TBAC Survey Launches; Coupon Rise May Pressure Long End
I think TBAC questionnaires go out this week. Any question suggesting an increase in coupon issuance could pressure the long end.
Active IG Issuance Day; USTs Face Pressure Post‑rally
Looking to be an active IG issuance day. USTs feeling a bit of pressure after a nice overnight rally
Buy Front-End On
Solid strategy to buy the front end when pricing hikes. Trump generally turns it around with a positive spin. 5s up more than 10 ticks since the Globex Sunday night open.
Core CPI Must Rescue Markets Amid 0.9% Crude Spike
CPI hedging dominating now after 30y auction. Crude driven headline expected to print at an eye-popping 0.9% so it will be up to core to save us
Israel-Lebanon Talks Boost Treasury Gains, Optimism Rises
Another does of optimism after Israel agreed to direct talks with Lebanon. USTs reversed earlier losses and surged higher with long-end lagging before 30y auction. WIs 4.88
Treasury Yields Surge Above 4.9% Amid CPI, Auction Pressure
Between tomorrow's CPI and today’s 30-year auction, Treasuries are feeling the heat. That ceasefire euphoria has already faded - 30s are back north of 4.90%
UST Rally Surges Confidently Amid Fragile Truce
It's a fragile truce so I am surprised how confident the UST rally has been overnight. I guess taking cues from Trump who seems to have his own favored take on developments
Trump's Iran Threat Drives Treasury Volatility, Long Bonds Lag
Trump’s Iran ultimatum is basically the only story for bond traders today. USTs have seen a volatile morning, swinging back and forth in reaction to the news and moves in crude oil prices. They are now recovering from the early...
Iran Conflict Spikes Oil, Threatens UST Long‑end Auctions
This is a high-stakes week for the bond market. The recent spike in crude prices - fueled by the conflict in Iran - will show up in March’s inflation data. The consensus on Wall Street is a headline print...
Quiet Market Ahead of March Payroll; Globex Closes Early
Cozy mini market day for the release of the March payroll report. Globex closes at 11:15 am for Good Friday
Markets React to Labor Data; ADP Beat Nudges Yields
Market will be sensitive to labor market data. A smallish ADP beat pressuring Ts a bit
April Tax Season Squeezes Liquidity, Hits USTs
It's quarter-end with a smallish duration extension later today. More importantly a reminder that April is the cruelest month for USTs as tax payment season liquidity squeeze generally pressures financial assets https://t.co/k7egjG0Wku
Markets Price 5bps of Rate Cuts This Year
Cuts winning out vs hikes now. Market net pricing 5 bps of cuts this year https://t.co/jSHybRo8Ni
Fed Funds Futures Return to Normal, Near‑Term Hike Priced Out
Fed funds futures mostly back to "normal" as the near term rate hike gets priced out. Live chart vs last Thurs. https://t.co/F0dnQCJ9pu
Inflation Swap Forward Gauge Peaks, Now Weakening on Downside Risks
Think of the 1-year forward 1-year inflation swap as a market gauge for the current inflation vs growth battle. At the start of the war, the forward measure surged higher along with the current 1-year swap as inflation concerns dominated, but...
Trump Claims Middle East Nearing Freedom From Iranian Terror
U.S. President Donald Trump: "Tonight, we are closer than ever to the rise of the Middle East that is finally free from Iranian terror and aggression."
STIRs Reveal Uncertainty: Inflation vs Growth Slowdown
Not often you see STIRs trying to price hikes and cuts at the same time, but that is the current level of uncertainty. What will dominate in the next few months, inflation or a growth slowdown? Get...
5s Belly Pressure Rises as Back Side Flattens
And finally looking at the broad curve, belly (5s) has been under pressure past few weeks mostly driven by the flattening on the back side. Not a fan of 5s generally but it has cheapened a bunch and is...
5‑Year SOFR Swap Spreads Dip Below
5y SOFR swap spreads have been heavy lately and just narrowed below -35 bps. Tactically good level IMO esp with the possibility of reg relief soon https://t.co/fjvHI7HVCz
Steepener Trade Finds Relief as Front‑end Yields Rise
The UST 2s5s steepener has been my 'white whale' trade the past year, facing constant pressure from shifting macro drivers. It was first flattened by the AI disruption trade, then crushed by the surge in front-end yields following the outbreak...
5s30s
5s30s just took out the low from Monday. Back end flattening aggressively post auction https://t.co/KwTSaaxDhY
Weekend Angst Pushes 2s and 5s to Daily Lows
2s and 5s low of the day before the 7yr auction. Not too surprising after two tailing auctions but obviously weekend angst major driver.
Israel Kills IRGC Navy Commander; Tension Spikes at Strait
Israel eliminated Alireza Tangsiri, commander of the IRGC Navy, in last night's airstrikes. All eyes on the strait
5-Year UST Auction Likely Tough After Poor 2-Year
UST 5y auction will be interesting after a nasty 2y yesterday. Some news cross-currents may have affected clean bidding for 2s which should be a factor for 5s today as well. Also more of a concession would be...
Supply Pressure Keeps Rates Elevated Amid Fed Pause
UST and IG supply will be an added headwind for rates this week. The whole curve is trading above the Fed's overnight target range as rate cuts go on pause for now and hedging for a near term rate increase...
USTs Open Rough; Front-End Pressure
Nasty open for USTs with front-end under the most pressure. 2y futs off 3.5 ticks
Trump Uses Iran Grid Threat to Bait NATO
Is Trump’s threat to destroy Iran's power grid a gambit to pull NATO and Europe into the Strait of Hormuz? It’s a smart leverage point, given that Europe and Turkey are the ones most vulnerable to a new refugee crisis.
Waller Warns Oil Could Eventually Lift Core Inflation
Waller having his own personal Trichet moment: "oil can bleed through to core inflation at some point"
Europe/UK Rate Hike Likely: 12% April Odds
Europe/UK back at it, forcing their rate hikes on us. April hike odds 12%... more than just noise
UK’s Repeated Crises Undermine Global Economic Stability
Why is the UK always the source of curve instability? Brexit, Truss and now this
Powell's Hawkish Tone Signals No Rate Cuts Yet
That was a hawkish presser. JP discounted the latest NFP print and revisions. Spent time discussing rate hikes even if hypothetical. Highlighted anchored inflation expectation as a prerequisite for further rate cuts.
Powell's Low Job Breakeven Comment Pushes USTs Down
USTs pressured lower by Powell's comment that breakeven rate for new jobs is very low
FOMC Day May Reset Market’s Minimal Cut Outlook
FOMC day and "extended pause" hedging pressuring whites. 2026 cuts down to 23 bps. Of course, Fed has an opportunity reset all of this via FOMC statement, SEP, and presser. Should be a fun day https://t.co/pMoJFfaIiY
Fed's Inflation View to Steer Near‑term Rate Path
Despite the recent steepening of the back-end, hard to fade and set up for next week's auctions with FOMC tomorrow. Fed clarification on how they view the recent crude inflation will have a strong impact on the...
Sell‑side Fades War‑Inflation Trade, Energy Seen as Growth Killer
Sell-side is fading the war-inflation trade in the front end. The consensus? High energy prices are a growth killer, not a long-term inflation driver. For now, the tape is happy to ignore them.
Markets Stay Calm on 5-Year Inflation Outlook
Market relatively sanguine about longer term inflation. 5 year, 5 year forward inflation swap showing no angst despite crude elevating front short-term swaps https://t.co/b8Po5HE6EV
Fed Stalls Amid One‑Time War Inflation, Awaiting SEP Clarity
Fed's in a tough position here. Labor market and economy in general need a bit of TLC but war inflation may be one too many one-time price level increase. Default reaction will be no reaction for now. FOMC...