5-Year Yield Highest Since 2007

TYZ3 deals at 106-08, +0-01, in line with late NY levels

• Cash tsys finished 7-14bps cheaper across the major benchmarks. The belly lead the cheaps with the 5YY printing it's highest level since 2007.
• Issuance in Asia-Pac and Europe weighed on the space as Tsys extended Mondays moves linked to US efforts to prevent the Hamas/Israel conflict from spreading across the region.
• Losses extended after firmer than forecast Retail Sales and an upward revision to the Atlanta Fed's GDPNow to 5.4% Y/Y for Q3. FOMC dated OIS price a terminal rate of ~5.50% in Jan 24 with ~50bps of cuts by Sep 24.
• TY was supported at 106-03+, the low from Oct4, if this breaks the next support level is 106-00 round number support then 105-06+, 2.0% 10-DMA envelope.
• September's Monthly Economic Activity from China provides the highlight in Asia. Further out we have House Starts, Fed Beige Books and a number of Fed speakers including Philadelphia Fed President Patrick Harker and New York Fed President John Williams.