US Treasuries: Curve steepens with long yields at cycle highs – Deutsche Bank

Deutsche Bank’s Early Morning Reid notes a mixed US Treasury session, with 10-year and 30-year yields holding or extending post-2000s highs while the 2-year falls.

Front-end supported, long-end elevated

"As we await today's latest US core PCE, and arrive at quarter-end, markets have put in a pretty mixed performance over the last 24 hours, with divergent signals across the major asset classes. On one level there was relief, as oil and gas prices fell back again thanks to some positive supply headlines, with Brent crude down -2.56% to $102.59/bbl. And together with NY Fed’s Williams suggesting there is no “urgency” for the next hike, that helped to dial back expectations of Fed tightening."

"That backdrop led to a mixed session for US Treasuries. Initially, yields hit fresh highs across most of the curve before paring back those gains, with the 10yr yield ending the day unchanged at its post-2007 high of 5.24%. Despite the eventual pullback, there was still a fresh milestone for 30yr yields (+1.9bps), which reached a post-2002 high of 5.57%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)