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Bear Steepening on Fed Watcher Comments, 2s30s Block Support

  • Large 2s30s steepener Block just now at 0935:14ET:
    • +11,470 TUZ2 102-62, through 102-01.75 post-time offer vs.
    • -3,000 USZ2 118-19, through 118-22 post-time bid.
  • Short end support following tweet/story from WSJ economics correspondent Nick Timiraos has seen sporadic counter selling from specs, fast$ accts skeptical over gist of message: 50bp hike in Dec instead of 75bp currently priced - softening expectations after a 75bp at the next FOMC on on Nov 2 current gives the Fed room to maneuver with other tools to combat inflation.
  • Dec 2Y futures surged to 102-04.62 high (+7) before paring move to 102-02.5 (+4.75) currently, bond futures remain under pressure, however, USZ2 at 118-13 (-201) currently vs. 118-06 low.

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