US Treasury yields have slid further overnight while equities losses are stacking up on – you guessed it – global growth fears. That, and the Trump impeachment train is… well… moving forward.With Treasury yields having failed to break out to the upside, the 10y at 1.58 could test the early September low of 1.43 if the US ISM services PMI and tomorrow’s labor market report disappoint. Still, the 2y10y yield spread is actually grinding wider as punters put increasing odds on further Fed rate cuts (3m10y spread closed below zero for the 101th day). Hence, forwards USD OIS rates have sagged. And, truth be told, the OIS market is a rollercoaster. That’s not just because the volatility in the underlying, the federal funds rate, but also because markets need less than a week to price in or out a rate cut/hike. In any case, the 21m1m forward, the low point of the curve, was at 1.01 at pixel time. Early September we clocked a low at 0.75 and a high mid-September at 1.399.

For the full report, click HERE