[MARKET ANALYSIS] T-note futures remain lacklustre after the bond rout deepened with the US 10yr yield at its highest since 2007

The composition here is a classic bear steepening, the long end leading while the front end is anchored by policy expectations, and episodes of that kind have historically been more durable than front-end-led moves because they reflect supply and premium rather than the path of the policy rate alone. The distinction worth drawing is between a rates-led move and an inflation-expectations-led one: the former weighs on duration broadly, the latter shows up first in breakevens and in the energy-sensitive curves, and the overnight pullback in oil easing Bund pressure while USTs stay offered is the kind of cross-market divergence that helps separate the two. Weak auctions and underwhelming buyback operations have in past episodes been the tell that dealer balance sheets are absorbing supply reluctantly, making subsequent auctions the points of maximum information. Japan's super-long sector at multi-decade yield highs alongside the domestic enhanced-liquidity auction fits the pattern of global long ends trading as one complex, with correlation across curves tending to rise during premium-driven routs. The follow-ons of note are the next long-dated supply events in each jurisdiction, further central bank commentary against the prevailing repricing, and whether oil resumes its climb, since energy has been the common input to each leg of the move.