Wake up! The long bond is up two points!
TLT•The US long bond rose two points overnight as 10-year Treasury yields fell 19 basis points, their biggest daily move since early 2023. Investors weighed concerns about AI infrastructure funding and oil above $113 a barrel.
1. Treasuries rally
The US long bond rose two points overnight, while 10-year Treasury yields fell 19 basis points. Fed funds futures rallied as much as 22 ticks, removing an entire rate hike from next year's pricing, while a December move was no longer fully priced in.
2. AI funding concerns
Investors were concerned about the scale of funding needed for AI computing infrastructure. Meta's mention of needing “hundreds of billions of dollars” for capital spending coincided with its shares falling almost 7%; CoreWeave lost another 10% and credit spreads widened across the sector.
3. Oil and inflation risks
Brent futures were above $113 a barrel, with prices over $100 through March, while crude for immediate delivery was higher. The article said persistent conflict in the Gulf and oil prices would keep inflation in focus when the Fed meets next week.
