Live Updates > Live Update Details
2026-02-17 21:40:43
[US Treasury Bull Market Continues to Flatten, MBS Spreads Trapped in "Price Discovery" Dilemma] ⑴ On Tuesday, the strong bull market in US Treasuries continued its flattening trend, with the market repricing after the holiday. Dragged down by risk aversion in global stock markets and AI-related sell-offs, the 10-year US Treasury yield fell to 4.018%, a new low since November 28th of last year. However, the MBS spread lagged significantly, finding itself in an awkward "price discovery" situation against the backdrop of mortgage rates nearing recent lows. ⑵ On the macro level, the market is digesting multiple signals. Japan's fourth-quarter GDP fell far short of expectations, providing justification for Prime Minister Shigeru Ishiba's aggressive fiscal stimulus, but a Treasury report warned that bond issuance could surge by 28% within three years, raising concerns about debt sustainability. Weak UK employment data, with the unemployment rate rising to a five-year high, has led to a 75% market bet on a Bank of England rate cut in March. ⑶ Domestically, the New York Fed Manufacturing Index and the NAHB Housing Market Index will be released today. This week's focus includes the Federal Reserve meeting minutes, the revised Q4 GDP figure, and PCE inflation data. Additionally, the Treasury will issue $16 billion in 20-year Treasury bonds and $9 billion in 30-year TIPS this week. (4) Geopolitical and policy risks are also a major concern. The US-Iran Geneva talks and the naval exercises in the Strait of Hormuz have drawn attention, and the Supreme Court may rule on the legality of Trump's tariffs on Friday. Federal Reserve Governor Barr and San Francisco Fed President Daly will speak today on AI and the labor market, with the market hoping for policy clues.
