[MARKET ANALYSIS] Treasury futures retreat with yields underpinned as oil prices rebounded

USTs: -5.5 ticks

• Mildly retreated as yields edged higher in tandem with oil prices, while participants await central bank policy decisions, including from the Fed later today.

Bunds: -26 ticks

• Dipped beneath the 122.00 level amid inflationary pressures and looming Bund supply.

JGBs: -33 ticks

• Conformed to the downside momentum seen in global peers amid higher energy prices.

Sessions where core government bond futures sell off in tandem on a rebound in crude are a familiar pattern: the transmission channel is the inflation expectations component of nominal yields, with breakevens tending to lead and real yields following when the energy move is sharp enough to feed headline prints. The correlation across USTs, Bunds and JGBs here is consistent with a global rates complex trading as one duration asset rather than on domestic idiosyncrasies, which is typical in the run-up to a major central bank decision when positioning is light and directional conviction is low. The two distinctions worth drawing are the drivers: oil-led weakness acts through the inflation breakeven and is often partially retraced if the energy move fades, whereas supply-led pressure, as flagged for Bunds, acts through term premium and concession building into the auction and tends to persist until the paper is absorbed. Pre-decision sessions of this kind have historically seen ranges compress into the announcement, with the initial move frequently reversed or extended depending on the statement's inflation language rather than the rate outcome itself. The follow-ons are the Fed decision and press conference tone on energy pass-through, the Bund supply event, and whether JGB weakness invites any verbal pushback given the domestic sensitivity to imported energy costs.