Bond Traders Weekly Outlook: US Treasury Yields Surge After Blowout Jobs Report

Friday was a day of reversal for all markets after the blowout jobs number. U.S. Treasury yields reversed sharply higher Friday, with two-year yields surging 19 bps. The data and yields that followed spurred a US dollar reversal, with the yen, Australian dollar, New Zealand dollar and South African rand all down around 2%. The euro was down 1.1% as it gained on the crosses. During the week we saw the BOE and ECB raise rates 50bps, the Fed and … Continue reading “Bond Traders Weekly Outlook: US Treasury Yields Surge After Blowout Jobs Report”

Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC

U.S. Treasuries pulled back for the second consecutive day on Friday, resulting in a mixed finish for the week. Inflation watchers saw a milder PCE as expected while Japan’s Tokyo Core CPI rose 4.4% yr/yr in January it was back on topic. The 10-yr note yield settled the week at 3.52%. The 2-yr note yield, which is most sensitive to changes in the Fed funds rate, settled at 4.21%. U.S. Treasuries completed this week’s spectacular note auctions with the $35 bln 7-yr … Continue reading “Bond Traders Weekly Outlook: US Treasury Auctions Outperform Ahead of FOMC”

Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter

U.S. Treasuries continued the move from last week through Wednesday giving back most of those gains Friday resulting in a slightly higher finish for the week in most tenors. The long bond ended negative territory for the week while the 10-yr note and shorter tenors gave back most of their gains from Wednesday’s surge that sent yields on these tenors to levels not seen since September. Together with hopeful rhetoric Treasuries and European debt faced pressure at the end of … Continue reading “Bond Traders Weekly Outlook: U.S. Treasuries Backed Off September Highs on Optimistic Chatter”

Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand

U.S. Treasuries closed out the week on a lower note, after two days of strong gains around the December CPI report. Fed Chair Powell’s speech at the Riksbank International Symposium offered no anguish and a strong University of Michigan’s consumer sentiment report finished the week. The four-week bill yield jumped nearly 25 bps to 4.45% amid growing focus on the upcoming debt ceiling debate. The week saw three extremely strong auctions. $18 bln 30-yr bond reopening, $32 bln 10-yr note reopening, … Continue reading “Bond Traders Weekly Outlook: US Completes Three Strong Auctions with Spectacular International Demand”

Bond Traders Weekly Outlook: Treasuries Soar on Soft Data Ahead of CPI and Powell

U.S. Treasuries closed out the first week of 2023 in beastly form Friday following the December jobs report average hourly earnings growth moderating to 4.6% year-over-year from 4.8% in November. It is a key gauge for the Fed and front end led a broad-based rally fueled by short covering. The soft wages data had some kindling thrown on from ISM services and factory orders, both much weaker than anticipated. The US dollar concurred with the Bond market and weakened sharply against … Continue reading “Bond Traders Weekly Outlook: Treasuries Soar on Soft Data Ahead of CPI and Powell”

Bond Traders Weekly Outlook: Yields Rise into Year End

U.S. Treasuries closed out 2022 with higher yields across the curve. The 10-yr note yield held under 3.90%, and the 2s10s inversion remained at 54 basis points. The 2-yr note began the year at 0.73% and settled at 4.42% on the last trading day of 2020, up five basis points. The 10-yr note began the year at 1.51% and closed out the year at 3.88%, up five basis points. For the month ten-year Treasury yields rose 27 bps to seven-week … Continue reading “Bond Traders Weekly Outlook: Yields Rise into Year End”

Bond Traders Weekly Outlook: Pressure Alleviated in 2s10s Spread with BOJ

U.S. Treasuries last week alleviated some pressure on the 2s10s spread, which expanded by 16 bps to -56 bps. The U.S. Dollar Index slipped 0.1% to 104.33, down 0.5% for the week leading into Christmas.  Bonds ended the week lower with number of releases, Japan’s November core CPI increased at its fastest yr/yr pace since 1981 in the November. The big event for bonds was the Bank of Japan shocking market by adjusting the central bank’s yield curve control program … Continue reading “Bond Traders Weekly Outlook: Pressure Alleviated in 2s10s Spread with BOJ”

Bond Traders Weekly Outlook: Europe, Over Tightening with Recession Fears

U.S. Treasuries saw strength in the shorter tenors reflecting a manifestation of inflation related Fed overtightening and forced recession fears. Europe, particularly Italy, is unnerving credit markets which is also giving treasuries a bid. Treasury yields declined this week in the face of a surge in European yields. For the week, two-year Treasury yields dropped a sizable 17 basis points to a more than two-month low 4.18% (down from Nov. 7 high of 4.72%). and the 10-yr note yield fell … Continue reading “Bond Traders Weekly Outlook: Europe, Over Tightening with Recession Fears”

Bond Traders Weekly Outlook: CPI and FOMC on Deck

U.S. Treasuries were lower after a choppy week with longer tenors leading the pullback after outperforming earlier in the week.  The 2s10s spread ended the week at -77 bps, one basis point wider from last week’s settlement. What caused the angst? US reports that questioned a less hawkish tone from the fed at next week’s FOMC. Friday, we had a PPI hotter than expectations ahead of next week’s Consumer Price Index We also had an above-consensus preliminary reading of the … Continue reading “Bond Traders Weekly Outlook: CPI and FOMC on Deck”