Reply To: Traders Market Weekly: Fed, Inflation and Profit Warnings


U.S. Treasuries opened the week positive territory.

Today’s $41 bln 3-yr note auction, which met weak demand slipping to fresh lows after the $32 bln 10-yr note reopening also met underwhelming demand, producing the biggest tail (2.7 bps) since April.

5-yr note joining longer tenors in the red while shorter tenors held onto slight gains. Today’s backtracking lifted the 30-yr yield to a fresh high for the year, took place ahead of tomorrow’s release of August CPI even though the New York Fed released a report showing that inflation expectations for the next three years dropped to 2.8% in August from 3.2% in July and 3.6% in June while expectations for the year ahead decreased to 5.7% from 6.2%.

Crude oil climbed for the third consecutive day
U.S. Dollar Index fell 0.6% to 108.35, reaching its lowest level in nearly three weeks.

Yield Check:
2-yr: -1 bp to 3.56%
3-yr: -2 bps to 3.60%
5-yr: +1 bp to 3.46%
10-yr: +4 bps to 3.36%
30-yr: +6 bps to 3.51%