US Treasury yields were broadly flat across the curve

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September 23, 2026

Credit Ratings
Macro News

US Treasury yields were broadly flat across the curve. On the data front, Richmond Fed Manufacturing Index came in at -2 vs expectations of 2. Separately, the US 2Y Treasury auction priced at 4.787%, with a bid-to-cover ratio of 2.63x. Brent crude slipped below $99/bbl as Saudi Arabia restarted its East-West oil pipeline, with Riyadh targeting a meaningful increase in flows within days and reducing reliance on the Strait of Hormuz.

Separately, Richmond Fed President Tom Barkin said inflationary pressures could take time to ease with risk becoming entrenched, while noting the economy and labour market remain solid. New York Fed President John Williams said the transition to central clearing for US Treasuries and Treasury-backed repo transactions is ahead of schedule and reiterated the Fed’s commitment to maintain ample bank reserves. Boston Fed President Susan Collins backed last week’s rate hike, saying a more restrictive policy stance would help ensure inflation returns durably to the Fed’s 2% target.

Looking at equity markets, the S&P closed flat and the Nasdaq moved higher by 0.5%, closing at an all-time high level. US IG CDS spreads were 0.2bp tighter, while HY CDS spreads tightened by 1.0bp. European equity markets ended mixed. European IG CDS spreads were 2.2bp wider, and Crossover spreads tightened by 3.3bp. Asian equity markets have opened mixed this morning. Asia ex-Japan CDS spreads tightened by 1.6bp.

Rating Changes

Term of the Day: Pre-Capitalized Securities (P-Caps)

Pre-Capitalized Securities or P-Caps, refer to a unique type of asset-backed security issued by a company that gives it access to raising debt funding. They are considered to be similar to a revolving credit facility, but can be much longer dated (going over 10 years) with less counterparty risk. The benefit that P-Caps offer is that they are held off the balance sheet, in a trust until the company eventually needs the funds. Hence, they do not contribute to financial leverage. Besides, they also offer a standby credit facility to the issuer providing them immediate liquidity especially in times of stress events. As per Santander, P-Caps are mostly issued by insurance companies and trade in the secondary market typically at a discount to comparable senior unsecured bonds from the same company. They add that P-Caps are generally rated in-line with senior debt.

Talking Heads

On ‘Big Shift’ in Debt Markets’ View of Weather Risk – Sarah Kapnick, JP Morgan

“I have seen a shift in understanding on the fixed-income side about how to start pricing in climate from the physical standpoint, and that’s a big shift from five years ago to today,”

Hedge Funds Pull Back From the Basis Trade as Bond Gaps Vanish – Jason Williams, Citibank

“Basis books are declining as dislocations and volatility have fallen materially over the past few years,… Rather than signaling risk, the shrinking opportunity set suggests that underlying Treasury demand may be stronger than we think.”

On US Displays Total Lack of Fiscal Discipline – Howard Marks, Oaktree Capital

“Forcing rates down by buying bonds is like a doctor applying an ice pack to a patient with a fever,… The ice pack may lower the patient’s temperature, but the patient isn’t likely to get healthy until the underlying cause of the fever has been dealt with.”

Top Gainers and Losers- 23-Sep-26*