Treasury yields dip but continues to probe the top of the range
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There is something disquieting about a government fighting markets. There is a certain futility about it in large part because it rarely works. When it does work, it's usually of the Mario Draghi "whatever it takes" variety and some dramatic actions. Treasury Secretary Bessent ta
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4 itemsHere’s how US Treasury Secretary Bessent could tempt the 10yr yield back down
The desk interprets recent commentary by Padhraic Garvey regarding potential actions by US Treasury Secretary Bessent to lower the 10yr yield, emphasizing that aggressive buybacks and auction cancellations could impact long-end swap rates. Per the full note [source], the current landscape hints that while yields are not excessively high relative to SOFR rates, a significant Treasury market sell-off could provoke a much-needed adjustment. With upcoming targets for EUR/USD, GBP/USD, and USD/JPY also in play, the desk believes the Treasury might be considering interventions, albeit not until absolutely necessary.
Here’s how US Treasury Secretary Bessent could tempt the 10yr yield back down
Rates Spark: Don’t get too comfortable
The desk interprets the current stabilization in US Treasuries as a temporary reprieve rather than a true market reversal, with potential risks looming ahead. According to the analysis, recent Treasury auctions indicate robust demand, but the environment remains fragile, keeping options open for price adjustments. Per the full note [source], the 10-year yield sits just below 5.25%, reflecting a calm that may not last as market participants could reignite discussions on fiscal policies, particularly around the looming mid-term elections. Current consensus for EUR/USD reflects a mixed outlook as varying targets from banks suggest differing perspectives on future currency strength.
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