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2025-11-03 20:36:26
[Undercurrents in the US Treasury Market: Interest Rate Cut Expectations Intertwined with Two Major Risk Events] ⑴ The US Treasury yield curve is showing a "bull market steepening" trend, with the 2-year yield falling by 2 basis points while the 30-year yield remains stable, reflecting market optimism that rising interest rate cut expectations and the end of quantitative tightening will improve liquidity. ⑵ This week faces two key risk events: the Supreme Court hearing on the legality of Trump's tariffs, and a government shutdown that could break the 35-day record. These two factors are suppressing market risk appetite. ⑶ According to Polymarket's forecast, the probability of the Supreme Court rejecting the tariffs has risen from 60% to 64%. If passed, it could trigger short-term market turmoil, but Trump is expected to maintain the current tariff level through other legal tools. ⑷ The government shutdown has lasted for more than 30 days, and analysts believe that unless a major unforeseen event occurs, it is unlikely to be resolved in the short term. This has led to delays in the release of many economic data and affected the real economy. (5) Manufacturing surveys show that businesses continue to be troubled by the triple uncertainties of tariffs, immigration policies, and government shutdowns. Although the October ISM Manufacturing PMI is expected to rise slightly to 49.5, it will still remain in contraction territory. (6) Trading strategy recommendations include two-way trading within the recent range (10-year yield 4.12%-4%), focusing on the fluctuation range of 4.10%-4.06%, while also paying attention to the guidance of Fed officials' speeches on market expectations.
