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And BMO's Ian Lyngen added that....>

US TSYS/RESEARCH
US TSYS/RESEARCH: And BMO's Ian Lyngen added that Treasuries, "by backing off
the local yield peak (2.40%)" for 10-year notes, "have built in a window for
potential weakness in the event of a stronger-than-expected inflation print
later this morning."
- "While an upside surprise might put 2.40% back into play, frankly we struggle
to envision a report that would inspire the needed confidence in the Fed's
narrative that lowflation is just a passing phase," Lyngen said. "That said, the
combination of better-than-anticipated retail sales and core-inflation could be
enough to temporary shift the tone in Treasuries toward something a bit more
bearish - although we would expect any such move to be short lived."

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