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Bank Fears Limit Earlier Cheapening With ECB, Further Labor Data Ahead

  • After a late open from a Japan national holiday, cash Tsys have on balance chipped away at yesterday’s post-FOMC rally, although have recently rallied as First Horizon slides pre-market with bank concerns again at the forefront after PacWest came under strong pressure after market yesterday. Yields are still below pre-FOMC levels except for the very long-end with further labor data and importantly the ECB policy decision ahead.
  • 2YY +2.9bp at 3.834%, 5YY +2.4bp at 3.322%, 10YY +1.9bp at 3.354% and 30YY +1.5bp at 3.697%.
  • TYM3 trades 14+ ticks higher at 116-11+ on decent volumes of 310k, off an intraday high of 116-25+ from the open (initial resistance). A further shift higher could open 116-30 (Apr 5/6 highs) whilst support is seen at 115-17+ (May 3 low).
  • Data: Challenger job cuts Apr (0730ET), Weekly jobless claims (0830ET), Trade balance Mar (0830ET), ULCs/productivity Q1 (0830ET)
  • Bill issuance: US Tsy $50B 4W, $45B 8W bill auctions (1130ET)

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