Bond Traders Weekly Outlook: US Treasury Curve Sees 2 Year Note Outperform

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  • #52951
    MoneyNeverSleeps
    Participant

    U.S. Treasuries are on track for a sharply lower start with shorter tenors expected to lead the early selling.

    Global equity markets have a mostly lower showing in overnight trade while sovereign debt has also been pressured. Chinese officials said that they are “reserving the right to deal with similar situations” after the U.S. shot down a high-altitude balloon over the weekend.

    In Europe, Bank of Italy Governor Visco said that inflation expectations for the short term are dropping quickly but several other European Central Bank policymakers spoke about the need for more rate hikes.

    Bank of England policymaker Mann said that the next move from the BoE is likely to be a hike rather than a cut or a hold.

    U.S. Dollar Index is up 0.2% at 103.12, nearing its 50-day moving average (103.72).

    Yields

    2-yr: +11 bps to 4.40%
    3-yr: +10 bps to 4.07%
    5-yr: +9 bps to 3.76%
    10-yr: +7 bps to 3.60%
    30-yr: +3 bps to 3.66%

    #53008
    MoneyNeverSleeps
    Participant

    U.S. Treasuries trade near flat lines after a quiet start to the Tuesday session.

    The market followed yesterday’s sharp slide with a restrained start that saw a slight show of relative strength from shorter tenors while 10s and 30s are a bit behind. The early underperformance in longer tenors is keeping yields on the 10-yr note and the 30-yr bond just above their respective 50-day moving averages.

    In the U.S., Fed Chairman Powell will speak at 12:40 ET while the U.S. Treasury will sell $40 bln in 3-yr notes. Crude oil is building on yesterday’s bounce while the U.S. Dollar Index is up 0.1% at 103.70.

    Equities are off to a modestly lower start with the S&P 500 (-0.3%) trailing the Nasdaq (-0.2%).

    Yields
    2-yr: -1 bp to 4.45%
    3-yr: -2 bps to 4.11%
    5-yr: UNCH at 3.81%
    10-yr: +1 bp to 3.65%
    30-yr: +2 bps to 3.69%

    #53100
    MoneyNeverSleeps
    Participant

    U.S. Treasuries higher start with issues in the belly expected to show relative strength in the early going. U.S. Treasury will sell $35 bln in 10-yr notes this afternoon. President Biden delivered the State of the Union address last night, calling for taxes on billionaires and higher taxes on corporate buybacks.

    Crude oil is seeking its third consecutive advance while the U.S. Dollar Index is down 0.2% at 103.18.

    Yields:
    2-yr: -1 bp to 4.45%
    3-yr: -3 bps to 4.09%
    5-yr: -4 bps to 3.80%
    10-yr: -3 bps to 3.64%
    30-yr: -1 bp to 3.70%

    #53147
    MoneyNeverSleeps
    Participant

    U.S. Treasuries feeding off the strong demand seen at yesterday’s 10-yr note auction and some better-than-feared year-over-year inflation data for January out of Germany. The back end of the curve is outperforming.

    Today, there will be a $21 billion 30-yr bond auction with results at 1:00 p.m. ET.

    Sweden’s Riksbank was the latest central bank to raise rates, moving its key rate up 50 basis points to 3.00%, as expected, and warning that further hikes are likely.

    The dollar is on the defensive against other major currencies, namely the euro, yen, and British pound. The U.S. Dollar Index is down 0.5% to 102.90.

    Yields:
    2-yr: -1 bp to 4.44%
    3-yr: -1 bp to 4.09%
    5-yr: -3 bps to 3.79%
    10-yr: -7 bps to 3.58%
    30-yr: -7 bps to 3.64%

    #53204
    MoneyNeverSleeps
    Participant

    U.S. Treasuries are on track for a lower start with longer tenors expected to pace the early weakness.

    In Europe, there has been continued talk about more rate hikes while crude oil is on the rise after Russia announced that its output will be reduced by 500,000 barrels starting next month.

    The U.S. Dollar Index is up 0.3% at 103.52, hovering just above its 50-day moving average (103.49).

    Yields
    2-yr: -1 bp to 4.51%
    3-yr: UNCH at 4.18%
    5-yr: +1 bp to 3.89%
    10-yr: +2 bps to 3.70%
    30-yr: +3 bps to 3.77%

    #52848
    KnovaWave
    Participant

    U.S. Treasury yields moved along the curve which tightened the 2s10s spread by another basis point to -77 bps. Longer-dated Treasuries ended the week
    [See the full post at: Bond Traders Weekly Outlook: US Treasury Curve Sees 2 Year Note Outperform]

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