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2026-05-29 22:01:29
[Trump Ceasefire Agreement Waiting Period Triggers Volatility in US Treasuries, Canadian Recession News Sparks Buying] ⑴ US Treasuries fluctuated overnight, falling in the Tokyo session due to month-end profit-taking and weekend risks. Prices rebounded in the London session as short covering pushed prices higher due to Trump's failure to sign a ceasefire extension agreement that would open the Strait of Hormuz. ⑵ Crude oil fell 19% this week, its biggest weekly drop since 2020. Month-end buying continued into the US session, with strong buying at the CME opening, followed by hedge funds. News of a second consecutive quarter of GDP contraction in Canada, indicating a recession, triggered spillover buying from Canadian bond traders, providing additional support for US Treasuries. ⑶ Continued buying from bank trading departments, mortgage accounts, and hedge funds drove the overall buying bias, but some traders were unwilling to hold positions ahead of weekend events. Overseas speculative accounts and intraday long positions sold at higher levels, while domestic traders also took profits on their auction long positions. (4) The two-year yield was 4.018%, down 0.7 basis points, and the ten-year yield was 4.453%, down 0.2 basis points. The spread between the two-year and ten-year yields was positive 43.52 basis points, and the spread between the two-year and thirty-year yields was 96.90 basis points.
