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Bear Flattening Under Low Volumes

  • Cash Tsys have seen a bear flattening following the delayed open with Tokyo on holiday as larger rate hikes continue to be priced in and oil prices rise. This has pushed 2s10s back close to post-pandemic flats of ~20bps.
  • 2YY +4bps at 1.976%, 5YY +4.2bps at 2.185%, 10YY +2.9bps at 2.178% and 30YY +1.3bps at 2.433%.
  • With an earlier high of 1.9907%, 2Y yields are close to the post-pandemic high of 1.9956% touched in the spike early in Powell’s conference.
  • TYM2 sits 10+ ticks down on the day at 124-10 on very low volumes. It remains comfortably above support from last week’s FOMC-induced low of 123-25+ whilst resistance is seen at 125-14+, the Feb 10 low and a recent breakout level.
  • Fedspeak: Powell (1200ET) speaks at NABE conference with text and moderated Q&A, with Bostic, 2024 voter, at the same event beforehand (0800ET).
  • Bill issuance: US Tsy $57B 13W, $48B 26W bill auctions (1130ET).

Source: Bloomberg

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