Getting close to a treasury market put?
March 6, 2026
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–Both CLK6 and Brent (COK6) are at new highs, 81.35, +2.71 and 87.21, +1.80, but the spread has come down significantly from Wednesday’s high of 7.94. Hormuz closure causing intensifying pains. (as of early morning writing). Oil is still the lifeblood of the global economy.
–US treasuries continue to slide this morning with TYM6 112-04, from yesterday’s settle 112-10. Current price is just more than 2 points off Sunday night’s high. A combination of high energy prices and the prospect of US re-shoring in overdrive is likely stoking concerns about both inflation and budget deficits. (3, 10, 30 year auctions next week T/W/Th).
–Red SOFR contracts weakest once again, with peak contract SFRU7 -8.5 bps at 9678. Sunday night high 9711.5. 5y yield rose 7.7 bps to 3.736, 10s up 6.7 to 4.142. Year’s range in 10s so far is 4.294 in Jan to 3.94 in Feb so we’re around 61.8 retrace, though slightly thru this morning. Vol rebounded sharply from Wednesday’s dump.
–NFP this morning expected 55k from 130k last. U/E rate 4.3%. Retail Sales as well. Though rates could jump on stronger than expected jobs day, low rates are as important to the admin as are reasonable energy prices. I don’t think a ‘treasury market put’ is that far away. I would think the balance of risks regarding Iran this weekend may be about even; i.e. there’s a possibility of good news.
