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2Y Yield Hits Fresh Post-2007 Highs After Fedspeak

  • 2Y Tsy yields have pulled back from new cycle highs (and fresh post-2007 highs) of 3.5731% but still sit +6bps at 3.563%.
  • ~5bps of that is since Waller and George spoke, with the takeaway being a continued push of higher rates for longer.
  • 2s10s flatten 6bps to -24bps despite an unwinding of an earlier rally in the long-end (with 10Y real yields holding just off cycle highs), back to pre-payrolls levels.
  • The intraday sell-off for TYZ2 to 115-24 sees it resume its downward trend after the midweek clearance of a bear trigger at 115-23 with a low of 115-13+, forming support, clearance of which would open 114-26 (Jun 16 low).
  • Entering the media blackout at midnight tonight, focus is firmly on US CPI on Tuesday. Governor Waller made clear today he wants to see months and months of slowing inflation (rather than just a couple) after being caught out by last year's re-acceleration.

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