US Treasuries (UST) Market
A string of good news, from strong labour market data to the dovish Fed, eased some pressure on the yield curve. Resultantly, the yield curve experienced a bear steepening with the 10/2 spread widening to 17 basis points (bps) from 15 bps.
However, the steepening was limited as the US government shutdown entered the third week. It will be the longest shutdown in US history if there is no bill passed by this week. A prolonged shutdown could start to take a toll on the US economy as warned by Powell.
As at yesterday, the 2-,5- and 10-year benchmark UST yields stood at 2.56%, 2.54% and 2.72%, respectively.