[MARKET ANALYSIS] Treasury futures remain afloat after some oil-related inflationary concerns were soothed

USTs: +7 ticks

• Steadily rebounded from yesterday's initial trough with inflationary fears soothed as oil pulled back from recent extremes, while a recent NY Fed survey showed consumer inflation median expectations for the one-year-ahead horizon softened to 3% (prev. 3.1% in Jan), and both the three and five-year horizons were unchanged at 3%.

Bunds: +43 ticks

• Returned to above the 127.00 level as geopolitics and oil volatility were the main catalysts for markets, while participants look ahead to incoming German trade data and a total of EUR 10bln of issuances split evenly between the Schatz and Bund auctions scheduled later today and tomorrow, respectively.

JGBs: +17 ticks

• Holds on to most of the prior day's after-hour gains amid an easing of oil-related inflationary pressure with Japan ordering to prepare the release of reserves, while there were several data releases from Japan, including final Q4 GDP data and a surprise contraction in Household Spending.

Treasury futures are showing resilience as recent oil price declines have alleviated inflationary concerns, supported by a softening in consumer inflation expectations from a recent NY Fed survey. The rebound in U.S. Treasuries, alongside significant moves in Bunds and JGBs, indicates that market participants are reassured about inflation risks, prompting a more cautious outlook for rate normalization. This shift could influence the Federal Reserve's policy considerations as well as broader market sentiment around fixed income assets.