US Treasuries initially had a front-end led rally on a jump in jobless claims. This faded in the afternoon following hawkish comments from the Fed’s Bostic that he is ‘totally comfortable’ skipping a rate cut at the Nov meeting if data suggests that is appropriate.
September Core CPI was rounded up to 0.3%, which although stronger than some estimates was in-line with several big banks’ forecasts. The long-end continued to struggle ahead of long-end supply, the 30yr yields pushed out to 4.40%.
After seeing tails in the 3yr & 10yr auctions this week, the 30yr auctioned stopped about 1.5bps through with indirects taking a record 80.5% of the auction.
Stronger CPI and a rebound in oil caused a jump in 10yr breakeven rates in the TIPs market to 233, a 4-month high.
Hong Kong is closed today and there are holidays in US and Japan on Monday, contributing to a lacklustre session in Asia this morning.
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