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10-Year T-Note Jun '20 (ZNM20)
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Contract Specifications for [[ item.sessionDateDisplayLong ]]
Barchart Symbol ZN
Exchange Symbol ZN
Contract 10-Year Treasury-Note
Exchange CBOT
Tick Size One half of 1/32 of a point ($15.625 per contract) rounded up to the nearest cent per contract; par is on the basis of 100 points
Margin/Maintenance $2,337/2,125
Daily Limit None
Contract Size $100,000
Months Mar, Jun, Sep, Dec (H, M, U, Z)
Trading Hours 5:00p.m. - 4:00p.m. (Sun-Fri) (Settles 2:00p.m.) CST
Value of One Futures Unit $1,000
Value of One Options Unit $1,000
Last Trading Day Seventh business day preceding the last business day of the delivery month

Description

U.S. interest rates can be characterized in two main ways, credit quality and maturity. Credit quality refers to the level of risk associated with a particular borrower. U.S. Treasury securities, for example, carry the lowest risk. Maturity refers to the time at which the security matures and must be repaid. Treasury securities carry a full spectrum of maturities, from short-term cash management bills to T-bills (4-weeks, 3-months, 6-months), T-notes (2-year, 3-year, 5-year, 7-year, and 10-year), and 30-year T-bonds. The most active futures markets are the 10-year T-note futures, 30-year T-bond futures, and Eurodollar futures, all of which are traded at the CME Group.

Prices - CME 10-year T-note futures prices (Barchart.com electronic symbol ZN) posted their high for 2022 in January as they fell further from the all-time high posted in March 2020.

T-note prices were under pressure throughout 2022 as soaring inflation prompted the Federal Reserve (Fed) to aggressively raise interest rates. U.S. consumer prices in March rose +8.5% y/y, the fastest pace in 40 years. At the March 2022 FOMC meeting, the Fed raised the federal funds target range by 25 basis points to 0.25%-0.50%, and the Fed's dot-plot signaled six more 25 basis point rate increases for 2022. Fed Chair Powell said, "if appropriate to move more quickly, we'll do so."

The Fed ramped up its pace of interest rate increases at the May 2022 FOMC meeting, lifting the federal funds target range by 50 basis points to 0.75%-1.00%. The sell-off in T-note prices paused briefly in Q2 after Fed Chair Powell said at the May FOMC meeting that a "75 basis point rate hike isn't being actively considered, but more 50 basis point rate hikes were on the table." Also, inflation eased as consumer prices in April fell to +8.3% y/y from March's 40-year high of +8.5% y/y.

At the June FOMC meeting, the Fed raised the federal funds target range by 75 basis points to 1.50%-1.75%, the largest increase since 1994, as strength in the U.S. labor market and rising inflation kept the Fed hawkish. The U.S. unemployment rate continued to fall throughout 2022 and dropped to a 2-year low of 3.5% in July. The Fed also raised its interest rate hike estimates at the June FOMC meeting, projecting another 175 basis points of rate hikes for the year.

After moving sideways to slightly higher into August, T-note prices continued their sell-off into Q4 of 2022, falling to a 15-year low in October. U.S. consumer price pressures peaked in June at +9.1% y/y, the most in four decades, which kept the Fed hawkish and prompted four consecutive 75 basis point interest rate hikes from June through November. At the September FOMC meeting, policymakers said ongoing rate hikes were "appropriate," and Fed Chair Powell said the Fed intended to return to "sufficiently restrictive" rates.

T-note prices staged a modest recovery into the year-end of 2022 as inflation eased and allowed the Fed to slow its pace of interest rate hikes. After posting a 40-year high of 9.1% y/y in June, U.S. consumer prices fell to a 14-month low of 6.5% y/y by December. At the December FOMC meeting, the Fed slowed its pace of interest rate hikes to 50 basis points to 4.25%-4.50% after raising rates by 75 basis points at the previous four consecutive meetings. The FOMC also projected a peak interest rate of 5.1% for 2023, and Fed Chair Powell said the size of future rate hikes would depend on incoming data. The 10-year T-note yield finished 2022 up +2.37 percentage points at 3.88%.

Information on commodities is courtesy of the CRB Yearbook, the single most comprehensive source of commodity and futures market information available. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope for commodities information is second to none. The CRB Yearbook is part of the Barchart product line. Please visit us for all of your commodity data needs.

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