The Treasury market was moving in a listless fashion on Tuesday in response to the U.S. intervention in Venezuela — with traders more focused on a busy calendar week that includes Friday's jobs report for December. ...

Market Overview - The stock market opened strong, returning to 4000 points, while the bond market showed signs of stress with rising yields [6][7] - The central bank conducted a 135 billion yuan reverse repurchase operation, with a net withdrawal of 4688 billion yuan due to 4823 billion yuan of reverse repos maturing [4][6] Interest Rates and Bond Yields - The 10-year government bond yield rose to 1.8615%, reflecting a significant upward trend [6][7] - The interbank funding rates remained stable, with DR001 around 1.26% and DR007 at approximately 1.43% [4][6] Redemption Regulations - New redemption regulations were officially released, easing previous restrictions for individuals to 7 days and institutions to 30 days, which is a notable change from the draft [6][7] Trading Volume and Market Sentiment - The trading volume for various repo codes showed significant activity, with RO01 at 65977.61 million yuan and R007 at 7306.10 million yuan, indicating a robust trading environment despite the bond market's challenges [5][6]

Core Insights - The yield on the 10-year Treasury note finished at 4.18% on December 31, 2025, while the 2-year note ended at 3.47% and the 30-year note at 4.84% [1] - The inverted yield curve, where longer-term Treasury yields are lower than shorter-term yields, is a reliable leading indicator for recessions, with the 10-2 spread turning negative before recessions [2][3] - The average lead time to a recession based on the first negative spread date is approximately 48 weeks, while using the last positive spread date yields an average lead time of 18.5 weeks [4][6] Treasury Yield Analysis - The 10-3 month spread also indicates lead times to recessions ranging from 34 to 69 weeks, with similar patterns observed as in the 10-2 spread [5] - The most recent negative spread for the 10-2 occurred from July 5, 2022, to August 26, 2024, while the 10-3 month spread was negative from October 25, 2022, to December 12, 2024 [3][5] Mortgage Rate Trends - The Federal Funds Rate (FFR) influences borrowing costs, and typically, an increase in the FFR leads to higher mortgage rates; however, recent trends show mortgage rates declining despite the Fed's rate-cutting cycle starting in September 2024 [7] - The latest Freddie Mac Weekly Primary Mortgage Market Survey reported the 30-year fixed mortgage rate at 6.15%, the lowest since October 2024 [7] Market Behavior and Federal Reserve Influence - Federal Reserve policy has significantly influenced market behavior, particularly in relation to Treasury yields and mortgage rates [8]

新华财经北京12月24日电（王菁）债市周三（12月24日）被股市小幅施压，银行间现券震荡盘整，短债 略优于长债，国债期货主力也呈现窄幅整理态势；资金面呈结构性分化，跨年需求升温非银融入成本走 高。 亚洲市场方面，日债收益率普遍回升，10年期日债收益率上行0.8BP至2.047%。 欧元区市场方面，当地时间12月23日，10年期法债收益率跌5.1BPs报3.559%，10年期德债收益率跌 3.6BPs报2.860%，10年期意债收益率跌4.9BPs报3.547%，10年期西债收益率跌4.6BPs报3.284%。其他市 场方面，10年期英债收益率跌2.7BPs报4.507%。 【一级市场】 财政部91天、182天、7年期国债加权中标收益率分别为1.2352%、1.3121%、1.66%，边际中标收益率分 别为1.2957%、1.3527%、1.69%，全场倍数分别为2.36、2.64、3.22，边际倍数分别为1.77、1.33、8.8。 机构认为，午间一度浮现降准传言，带动收益率一波快速回落，但影响短暂，随后重归震荡走势。跨年 资金需求有所升温，非银融入价走高相对明显，随着需求集中释放以及年末分层压力，跨年资金利 ...

Core Viewpoint - The article emphasizes the importance of establishing a personal investment system rather than making impulsive decisions based on market feelings. It advocates for a structured approach to entering and exiting the market, focusing on observing market trends and waiting for the right conditions to invest [1]. Group 1: Market Conditions - The stock market showed strong performance, influenced by expectations of a 25 basis point (BP) reduction in the Loan Prime Rate (LPR) and strong buying power from funds. Interest rates are experiencing a downward trend [5]. - The overnight U.S. non-farm payrolls exceeded expectations, while the unemployment rate reached a four-year high, slightly increasing the market's anticipation of a rate cut by the Federal Reserve in January [5]. - The central bank conducted a 468 billion yuan reverse repurchase operation, with 1,898 billion yuan maturing, resulting in a net withdrawal of 1,430 billion yuan. The funding environment remains balanced and slightly loose, with stable funding rates [3][5]. Group 2: Interest Rate Trends - The weighted average rates for various repurchase agreements remained stable, with R001 at 1.34% and R007 at 1.50%. The transaction volume for R001 was 77,020.14 million yuan, reflecting a slight increase [4]. - Long-term interest rates have decreased significantly, with the 10-year government bond yield dropping to approximately 1.836% [6][9]. - The article notes that the market for short-selling long-term bonds has become crowded, indicating potential risks for those engaged in such trades [6].

With the Fed lowering their Fed Funds Rate again last week , treasury rates -- especially those on the long end of the yield curve -- have been dominating headlines. The curve is still looking wonky, with the 3-month UST still yieldingNewsletter Author | Investment Advisor | Top 5% of Experts on TipRanks | Long Signal, Short Noise | I am a macro-oriented and data-driven investor who obsesses over connecting dots that others don't see (or want to see), expressing my views through concentrated, asymmetrical, ...

Core Insights - Social Security is a crucial financial support for retired Americans, providing guaranteed benefits for life [2][3] - Despite concerns about its sustainability, Social Security is funded through wage taxes, ensuring ongoing benefit payments as long as there are workers contributing [4] - Annuities can serve as a valuable supplement to Social Security, offering additional guaranteed income for retirees [5][6] Group 1 - Social Security benefits are guaranteed for life, making them a reliable income source for retirees [7] - Annuities provide lifetime income payments in exchange for a lump sum or periodic payments to an insurance company, enhancing financial security [6][7] - Combining fixed annuities with Social Security can create a stable retirement income that is less affected by market fluctuations [7] Group 2 - Low-risk investments like Treasury bonds and CDs may not generate sufficient income for retirees, highlighting the need for additional income sources [5][6] - The structure of annuities allows retirees to protect themselves from the risk of outliving their savings, making them an attractive option [6][7] - Retirees are encouraged to explore their options, as many may find they can retire earlier than anticipated with proper planning [7]

Core Insights - Rising long-end Treasury yields are challenging to explain and may indicate potential issues for investors, according to Apollo's Torsten Slok [1] Group 1 - The increase in long-end Treasury yields could signal trouble ahead for investors [1]

Core Insights - The Government Debt Management has decided to cancel the auction of Treasury bonds scheduled for 12 December 2025 due to the target amount for the year being reached [1] Group 1 - The cancellation of the Treasury bond auction indicates that the government has successfully met its funding goals for the year [1]

Summary of Key Points from the Conference Call Industry Overview - **Focus**: Global macroeconomic outlook, interest rates, commodities, currencies, and emerging markets Core Insights US Rates - Yields are expected to remain stable in the short term, with a forecast for 2-year yields around 3.60% and 10-year yields at 4.25% by 1H26, and 3.85% and 4.35% by YE26 respectively [10][33] - The Federal Reserve is anticipated to implement two rate cuts in 1H26, with a target range for the funds rate of 3.25-3.5% by 1Q26 [10][44] - The unemployment rate is projected to peak at 4.5% in 1Q26 before easing to 4.3% by 4Q26 [10] International Rates - Growth in developed markets (DM) is expected to remain at or above potential, with inflation gradually declining but remaining above target in some areas [4] - Central banks in DM are likely to pause or conclude easing cycles in 1H26, with specific forecasts for 10-year yields: 4.35% for UST, 2.75% for Bunds, and 4.75% for gilts by 4Q26 [4][36] Commodities - The oil market is expected to stabilize due to rising demand and production cuts, with a bullish outlook for gold projected to reach $5,000/oz [6] - Agricultural stock-to-use ratios are expected to remain low, indicating potential supply constraints [6] Currencies - A bearish bias on the USD is anticipated, driven by positive growth in the rest of the world (RoW) and US twin deficits [52] - Preference for high beta/yielding currencies, with key themes including global procyclicality and synchronized central bank pauses [53] Emerging Markets - Emerging markets (EM) are expected to experience lower macro volatility, supporting local markets in 2026 [6] - Growth and inflation in EM are projected to remain stable, with limited central bank easing [6] Additional Important Insights - The Treasury is well-funded through FY25, but a significant funding gap is expected to emerge in FY26, with coupon size increases anticipated starting in November 2026 [17][20] - The demand for Treasuries is shifting towards more price-sensitive investors, which may help keep long-term yields anchored at higher levels [29] - The passage of the OBBBA raised the debt limit by $5 trillion, expected to last until the second half of 2027 [23] - Seasonal patterns suggest a gradual decrease in bill sizes into December, followed by a rebound as corporate taxes lift the Treasury General Account (TGA) [21][23] Conclusion - The macroeconomic outlook indicates a cautious but stable environment for interest rates, commodities, and currencies, with specific attention to the evolving dynamics in emerging markets and the implications of fiscal policies on Treasury demand and yields.