[MARKET ANALYSIS] T-note futures remain subdued with money markets pricing outside chances of 50bps Fed rate hike in December

USTs: -5.5 ticks

• Remained subdued as participants digested the recent hawkish Fed rhetoric and firmer-than-expected CPI data, which spurred hawkish rate hike bets with money markets fully pricing in a hike in December of at least 25bps and an outside chance for a greater 50bps move, while price action is also constrained by the closure of cash treasuries trade on Wednesday due to Veterans Day.

Bunds: -9 ticks

• Remains subdued after retreating yesterday and with demand not helped by looming supply.

JGBs: -70 ticks

• Tracked the downside in global peers, with demand not helped by a rebound in Japanese stocks and the absence of any tier-1 data releases.

A session where futures drift lower on repricing of the terminal path rather than fresh news fits a familiar sequence: a firm inflation print followed by hawkish official commentary lifts the front end of rate expectations, and futures then trade heavy until the next data point either confirms or fades the move. The distinction that matters here is between full pricing of a 25bp hike and the tail pricing of 50; historically it is the shift in that tail, not the base case, that drives incremental selling in the belly and front of the curve, and such tail pricing has tended to be fragile, often unwound by a single softer print or a pushback speech. The cross-market pattern is also standard: Bunds and JGBs tracking USTs lower on correlation rather than domestic impulse, with Bund supply and a Japanese equity rebound acting as local amplifiers, a typical overlay in global rate sell-offs. The cash Treasury closure for the holiday thins liquidity and has historically exaggerated futures moves while muting conviction behind them. The tells ahead are whether Fed speakers endorse or lean against the 50bp tail, and the next inflation and labour releases, which in past episodes of this kind have resolved the repricing one way or the other.