U.S. Treasury sell-off resurfaces, SpaceX's new bond issuance increases market pressure
- U.S. Treasury yields rose across the board overnight, with the curve continuing its flattening trend, mainly driven by several major investment banks raising their interest rate hike forecasts for the year. Bank of America now expects the Federal Reserve could raise rates three times this year.
- A brief wave of buying occurred during the London–New York crossover but quickly faded. Commodity trading advisors waited for selling opportunities at the Chicago Mercantile Exchange open, while technical breakdowns triggered some small algorithmic sell orders.
- The market is also preparing for the SpaceX bond issuance. The deal has received Baa1/BBB/BBB ratings and is expected to issue bonds under Rule 144A/Reg S terms. The investor conference call will be held on Monday, and early positioning for hedging needs is adding extra pressure in the swaps market.
- In terms of yields, the 2-year rose to 4.219%, the 5-year stood at 4.272%, the 10-year touched 4.493%, and the 30-year reported at 4.932%. Yields across all maturities climbed by 4 to 6 basis points from last Friday’s close.
- Regarding the curve, the 2s/10s spread widened to 27.39 basis points, while the 5s/30s spread narrowed to 65.9 basis points from the previous day's 67.6 basis points, flattening by 1.7 basis points.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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