2s5s had been under relentless pressure in the past month (AI disruption and all) but finally a surge steeper after that weak a&& NFP print
06.03.2026 15:07
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2s5s had been under relentless pressure in the past month (AI disruption and all) but finally a surge steeper after that weak a&& NFP print
Market think Fed's hands are tied
A very weak bounce on a nasty payrolls print. Wow. Constant selling of USTs as they tried to rally as surging crude prices will likely limit what the Fed can do
Will check it out. Thanks
exactly
Same pattern all week. Another surge in crude prices and another down leg in USTs esp the front end. 2y yields have now surged 27bps since war started. Weak payrolls could shake up this dynamic though.
UST funding pressure starting to ramp up as swap spreads narrow 3-4 bps across the curve. 30y tenor now less than -78 bps
Long end holding up relatively well as curve has been flattening rather aggressively since the War started
I feel like over the next few months headline CPI will be spiky because of energy, you've got the increase in memory prices flowing through consumer electronics, real consumption growth might be negative because of the hit from gas prices, and then housing remains stuck.
Surging crude prices (bottom chart) make "pause" the Fed's default position. 2026 rate cuts down to 39 bps (top chart)
ISM employment gauge a bit higher 58.6 vs 53.1 last month. Payrolls print of Friday
It is a good sign, but fanatics don't fold easily
We're hearing from General Dan Caine right now, and the big takeaway is the scale of the slowdown. He says Iran’s response is down 86% compared to the beginning of the conflict.
Slight ADP beat but revision neutralize
Feb 63K vs 50K exp
Jan 22K orig now 11K
Long-end holding up relatively well. 5s30s down to 103 bps
Front-end USTs getting shellacked. Surging crude prices seem to be the primary driver
We had rallied quite a bit and Friday was month end with its structural buying that had made USTs crazy overbought into weekend.
It has been non-stop selling of USTs since futures opened last night. Buy the rumor, sell the news pattern
Middle-eastern Sunday markets having a relatively subdued reaction
NYT: Satellite imagery shows a black plume of smoke and extensive damage at the secure compound of Ayatollah Ali Khamenei, Iran’s supreme leader, in Tehran, though his whereabouts were unclear.
Yeah. I am following closely and haven't seen anything like that. His key advisor was killed.
Dario
Anthropic has framed the issue well: "you can use our models for anything other than domestic spying or autonomous weapons."
I am not sure how any of the other AI companies can comply without absolutely horrendous rep damage
Dario has Good Elon potential
The BIG Dystopian trade seems to be sell stocks and buy 5s.
MNI Chicago PMI for the past 20 years
MNI's Chicago PMI index highest since 2022 and positively ripping. This is just one of a bunch of B-tier regional PMI data sets, still a notable improvement tho.
New 2026 high for king 5s on the curve.
2s5s30s
PCE comp PPI
