USTs – Bull-Flattening Bias

U.S. Treasuries (10y 3.19) endured yet another session on Monday of little excitement. Risk-off flows continue, but investors are preferring the safety of short duration U.S. Treasuries and investment grade corporates. Nearly all longer durations are suffering out-flows. The...

TIPS Breakevens – Weekend Relief

 AQA Comments:   Breakeven spreads finished unchanged to slightly better on Friday. Treasuries weakened and the curve flattened as the short end underperformed (+2.5-3 bps) and longer maturities saw yields rise 1.5-2 bps. China’s Q3 GDP came in a tenth...

USTs – Bullish Outlook

U.S. Treasuries (2y 2.91, +3.4 bps) weakened at the short-end, sending the 2-year 5-year flatter to 13.6 bps. Economic growth across the globe is slowing with only 41% of major economies growing above one-year averages. Similar slow-downs have coincided...

USTs – Outlook Turning Bullish

U.S. Treasuries reversed early gains and yields slid higher into the close on Wednesday, rising 1-2 bps across the curve. Treasuries have been unable to sustain gains this week, but the impetus for long end yields to rise might be fleeting. Inflation expectations have softened,  placing...

USTs – Bull Flattening Expected

U.S. Treasuries shrugged off a steep 2+% recovery by equities, closing little changed across the curve. The options market shows inflation expectations are souring, placing a low 32% probability on headline CPI being able to run above 2.5% year-over-year...

USTs – Flattening Expected

U.S. Treasuries (10y 3.16) saw little action on Monday while equities pared losses. Risk off conditions are here according to BofA’s Global Flow index pushing to its highest since December 2016. But, this time flows from growth equities are...

USTs – Bull Flattening Outlook

U.S. Treasuries quietly finished the week, but maintained gains (10y 3.15) after the S&P 500 sank 4+%. Inflation momentum has greatly slowed in recent weeks, followed by the UMich consumer survey indicating a median 2.3% year-over-year rate for the...

USTs – Flattening Favored

U.S. Treasuries (10y 3.208, +0.2 bps) ended mixed after twice recovered from a slide to higher yields. Yields fell into the close as weakness in equities worsened (S&P 500 -2.5%). The curve steepened as the short end outperformed (2y 2.87 -1.6 bps) and the long end sagged (30y...