FinSer 

  Financial Focus
February 23, 2024
              

    

   GOOD MORNING! The Treasury curve did a bear flattening trade on Thursday with yields on the short-to-intermediate sector going up more than longer maturities’ yields. Part of the reason was a risk-on trade with stocks surging to new highs. Part of the pressure on bonds was the scaling back on bets of when the first rate cut by the Fed would occur. Also weighing on the curve was the Treasury announcement on sizes of next week’s auctions, which are all in the short-to-intermediate maturity range. Because of the short settlement, the auctions will be concentrated early in the week. The size on the 2-, 5, 7-year T-note sell were increased. For instance, Monday will have the 3-month, 6-month T-bills and the 2- and 5-year T-notes on the auction block, totaling $276 billion. The benchmark equity rode the AI bull up to new record highs (the Dow and S&P) or within spitting distance of its record high (the NASDAQ Composite). Finally, starting to become a blip on the markets’ radar is that the continuing resolution to keep the government open has some government Agencies hitting a deadline on March 1st. The remaining Agencies’ deadline is March 8th. For those wanting to complain about the Focus, use the AT&T line.

     After running uphill yesterday, US stock index futures being little changed in early trading suggests that equities may trying to catch their breath. Treasuries are trading mushy with yields slightly higher after the talking Fedheads stayed on message about being patient, wanting more evidence that inflation is sustainably trending lower and no rush to cut rates. Today’s market calendar is blank, leaving the focus on positioning for the weekend and next week’s supply blitz and month-end. 

 

GENERAL
TODAY             
PREVIOUS        
FED FUNDS
5.25% to 5.50% 5.25% to 5.50%
S & P 500
5087.03 4981.80
GOLD
2032.50 2038.50
YEN
150.67 150.23
EURO
1.0827 1.0855
WEST TEXAS CRUDE
78.61 77.91
T-BILLS
YIELD                
YIELD                 
3 MONTH
5.38 5.38
6 MONTH 5.33 5.33
1 YEAR
4.98 4.97
T-NOTES / BONDS
YIELD                 
YIELD                  
2 YEAR
4.72 4.67
3 YEAR 4.50 4.44
5 YEAR 4.34 4.30
10 YEAR
4.33 4.30
30 YEAR 4.46 4.46
                                                         Data Source: Bloomberg Financial Markets