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Daily Market Color

Daily Market Color

BOJ Caps a Week of Central Bank Pauses

Rates retreat to end busy week. Swap rates and UST yields backtracked from the week’s highs, a 3-6bp reversal from the strong post-FOMC sell-off. The move came despite hawkish Fed commentary, as Fed members Daly and Bowman said that at least one more rate hike is possible. Bowman seemingly favors multiple hikes, as she stressed, “I
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Markets Digest FOMC Results

Rates mixed in FOMC day hangover. Swap rates and Treasury yields were mixed across a steepening curve today, with the long end of the UST yield curve furthering multi-year highs. The 10-year yield rose 9bps and closed at 4.49%, a staggering contrast to the monthly low of 4.08%. In fact, today’s 10-year TIPS auction drew the
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No Rate Hike, But Multiyear Highs in Treasury Yields and Swap Rates

Rates soar after FOMC pause. Swap rates and Treasury yields jolted higher after the Fed announced hawkish projections for 2024 and beyond. Though the rate pause was effectively locked in by futures markets prior to the announcement, the hawkish dot plot and press release immediately sent the 2y UST yield 10bps higher, while the 10-year
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Oil Jitters Pre-FOMC

Markets bet on “higher for longer.” Treasury yields were up across the curve today, with the 2-year up ~4bps to 5.09% and the 10-year up ~6bps to 4.36%, as traders bet that the Fed will hold rates higher to curb inflation driven by rising energy costs and after hotter-than-expected inflation data from Canada. Equities were down
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Is it FOMC Day Yet?

Markets muted ahead of FOMC decision. Swap rates and UST yields were little changed ahead of Wednesday’s FOMC decision and dot plot release, which will be followed by BOE and BOJ hike decisions on Thursday and Friday, respectively. With the U.S. and BOE decisions under the microscope, a Bloomberg survey conducted today saw 59% of
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Rates Rise Again Amid “Triple Witching”

Today’s data overshadowed by major options event and UAW strike. Yields were generally up across the curve today, with the 2-year up ~2 bps to ~5.03%, and the 10-year up ~5 bps to ~4.33%. Driving market moves today was the “Triple Witching” event, where large volumes of stock options, index futures and index options all expired
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Gasoline Prices Fuel Hot PPI and Retail Sales

Rates rise on PPI, retail sales. Rates grinded higher throughout the session after a strong PPI print, though the figures did little to change rate hike expectations, and futures still suggest a ~33% chance of a hike by November’s FOMC meeting. Both the 2-year and 10-year yields jumped 4bps higher and closed at 5.01% and 4.29%,
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CPI Clears the Way for Fed Pause

CPI can’t stop the rally. The much-awaited August CPI print came in slightly above expectations, but not enough to create concern among market participants. Rates jumped to their intraday highs following the release but rallied throughout the remainder of the session. The policy sensitive 2-year UST yield dropped over 5bps to 4.97% while the 10-year
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Consumers Tell Fed – Conditions Are Tightening

Rates inch higher to start inflation week. Swap rates and UST yields moved slightly higher today ahead of CPI on Wednesday and PPI on Thursday. A slight increase in 1-year inflation expectations contributed to the move, though the 2-year yield closed unchanged at 4.99% and the 10-year jumped 3bps higher to 4.29%. Elsewhere, the S&P, DJIA, and
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CPI and PPI Ahead

Yields little changed ahead of inflation week. Swap rates and Treasury yields were mixed across a flattening curve today, with the 2-year yield inching closer to the 5% threshold after a rise of ~10bps on the week. A surge in corporate debt issuance was a main driver of the week’s UST sell-off, and upcoming CPI
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