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5Y Supply Plus Potential BoC Spillover In Focus

US TSYS
  • Cash Tsys on balance hold modestly richer across most of the curve. There was spillover from EU FI earlier, first a bid from lower UK PPI inflation before levelling off with a mixed German Ifo survey. 5Y supply headlines after yesterday’s strong 2Y auction, but before then could see spillover from a potential final hike from the BoC and outside chance of a pause in an otherwise light docket.
  • TYH3 trades 6+ ticks higher at 115-06+ close to an earlier high of 115-07+ that nudged above highs for the week. Resistance is seen at the bull trigger of 116-08 (Jan 19 high) whilst to the downside sits support at 114-16 (Jan 18 low).
  • 2YY +0.6bps (off the newly trading 31 Jan 2025), 5YY -1.9bps at 3.556%, 10YY -2.0bps at 3.432% and 30YY -2.0bps at 3.585%
  • Data: Weekly MBA mortgage applications/rates
  • Bond issuance: US Tsy $24B 2Y FRN note (91282CGF2) – 1130ET, US Tsy $43B 5Y note (91282CGH8) – 1300ET
  • Bill issuance: $36B 17W bill auction – 1130ET

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