TREASURY WRAP: T-NOTE FUTURES (U6) SETTLE 7+ TICKS LOWER AT 108-17+
The Treasury curve steepened as short-end yields fell on weak GDP data and scaled-back hike bets, while the long-end stayed high due to Fed Chair Warsh's lack of guidance.
News detail
Treasury steepen again in Fed fallout. 2-year -3.7bps at 4.229%, 3-year -4.6bps at 4.282%, 5-year -3.7bps at 4.373%, 7-year -3.3bps at 4.514%, 10-year -2.4bps at 4.663%, 20-year -1.8bps at 5.214%, 30-year -0.5bps at 5.207%.DAY: The curve once again steepened, a consequence of the short-end yields continuing to decline as the market dials back 2026 rate hike expectations. Meanwhile, the long-end was little changed after Wednesday's selloff in response to a lack of forward guidance from Fed Chair Warsh.Today's developments – US data and geopolitics – had little bearing on price action, which was ultimately driven by the continued fallout of Wednesday's Fed meeting. Data saw PCE largely match expectations in June, except the Core M/M reading, which printed slightly soft at 0.1% M/M (exp. 0.2%); personal income fell short of expectations, while spending matched forecasts. Meanwhile, advanced GDP Q2 printed 1.5% (vs. exp. and prev. of 2.1%), Core PCE Prices in Q2 came in at 3.4% (exp. 3.5%, prev. 4.4%), initial claims saw a modest rebound, and continued claims fell.The slight drop in oil prices also gave comfort to the short end, with the US 2yr yield now down to around 4.23% from a WTD 4.339% high. Diplomatic efforts offset concerns today over the latest round of strikes. Pakistani Foreign Ministry Spokesperson said discussions between Tehran and Washington are ongoing regarding the situation in the Strait of Hormuz and de-escalation, Al Jazeera reported.SUPPLYBills US sold 4-week bills at a high rate of 3.630%, B/C 2.80x US sold 8-week bills at a high rate of 3.675%, B/C 2.74x US to sell USD 92bln 13-Week Bills on 3rd August, USD 79bln 26-Week Bills on 3rd August, USD 52bln 52-Week Bills on 4th August, USD 95bln 6-Week Bills on 4th August; all to settle on 6th August STIRS / OPERATIONS Fed Pricing: 20.1bps (prev. Dec 20.6bps) EFFR at 3.63% (prev. 3.63%), volumes at USD 101bln (prev. USD 106bln) on July 29th SOFR at 3.65% (prev. 3.65%), volumes at USD 3.032tln (prev. USD 2.977tln) on July 29th NY Fed RRP op demand at 1.076bln (prev. 2.576bln) across 3 counterparties (prev. 5) on July 30th
What do investors think?
StockNow uses AI to translate and analyze information and does not guarantee its accuracy or completeness.