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Bear Flattening Ahead Of NFPs As Fed Continues To Push Back Against Pivot

US TSYS

A flat start for TYZ2, which hovers just above the base of Thursday’s session, -0-02 at 111-28.

  • Cash Tsys finished Thursday 3-11bp cheaper across the curve, with the front end leading the way lower as the curve bear flattened.
  • A soft round of dealing for UK Gilts provided an early negative lead for Tsys,
  • Hawkish Fedspeak pushing back against the idea of a picot was once again apparent on Thursday, with Governor Waller reinforcing the Fed’s commitment to fighting inflation during the NY-Asia crossover.
  • This allowed FOMC-dated OIS to nudge higher and pressured Tsys.
  • Block sales in 10-Year futures provided the highlight on the flow side, with the final such block seen late in the NY day.
  • Initial jobless claims revealed a larger than expected jump but didn’t impact the space.
  • Friday’s NFP print provides the highlight of the wider global docket on Friday (see our full preview of that event here), with comments from Fed’s Mester due to cross shortly before Williams, Kashkari and Bostic round off Fedspeak for the week on Friday.
  • A reminder that cash Tsys will be closed on Monday owing to the Columbus Day holiday, although there will be no alteration to CME futures trading hours.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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