Fixed income

Treasuries sold off, with two-year yields hitting the highest since before the December central bank "pivot." Swap traders ratcheted down their expectations for a Fed cut before July.

Indeed, investors are also positioning for Friday's consumer-price index revisions because of what happened a year ago: the update was significant enough to cast doubt on overall inflation progress.

Yields across the maturity spectrum climbed as much as 10 basis points on the day, reaching session highs after the ISM gauge of service-sector activity for January exceeded economist estimates.

Investors tightening their credit pocketbooks is creating opportunities for lenders. Firms like Värde can step into the gap, buying assets from banks and investing in fixed income.

The Treasury Department is expected on Wednesday to follow through on its November guidance of a third round of increases in its so-called quarterly refunding auctions of notes and bonds.

Truist sold $3.5 billion of bonds in two parts. The longest portion, an 11-year fixed-to-floating rate security, yields 162 basis points above comparable Treasuries.

The year-end yield on the bond, a global anchor for markets and U.S. mortgage rates, is the culmination of a stunning rebound for Treasuries.

The U.S. may be less rate-sensitive than other countries due to its long-term mortgages but could face tighter credit from hard-hit financial institutions.

The riskiest tier of the junk bond market, CCC, has gained nearly 20% year to date on a total return basis, making it the best-performing asset class in the U.S. fixed-income market.

Citigroup, Barclays and Morgan Stanley are just a few of the firms joining JPMorgan in what suddenly feels like a rush into direct lending.