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Bear Flattening To Start The US Session On Headline Watch

US TSYS
  • Cash Tsys trade cheaper, led by the front end for a bear flattening and underperforming EU FI across major benchmarks. We’re within yesterday’s ranges but after the larger flattening on the day, 2s are closer to lows having nearly returned to pre-initial claims levels whereas 10s are closer to highs. Subdued volumes in futures suggest lower conviction but could also help see some volatility ahead.
  • With a completely blank docket, headlines are likely the main driver for today’s session but with focus otherwise firmly on next week which includes US CPI on Tue and the FOMC decision on Wed in amongst an action-packed week elsewhere.
  • 2YY +4.3bp at 4.558%, 5YY +3.9bp at 3.897%, 10YY +3.3bp at 3.751% and 30YY +2.2bp at 3.910%
  • TYU3 trades 9+ ticks lower at 113-14 after yesterday’s low of 112-30 saw key support at 112-29+ (May 26/30 lows) remain intact. Volumes are below average at just over 200k.

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