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Bear Steepening Within Ranges As Big Week Begins

US TSYS

The Treasury curve has opened the week with some bear steepening, though yields have traded within Friday's ranges.

  • A big week lies ahead, with Wednesday bringing the Treasury's latest refunding announcement and the Fed due to announce tapering, and nonfarm payrolls Friday. In the meantime, ISM Manufacturing is today's key release.
  • The 2-Yr yield is up 0.8bps at 0.5051%, 5-Yr is up 2.4bps at 1.2074%, 10-Yr is up 2.5bps at 1.5768%, and 30-Yr is up 2.6bps at 1.9583%.
  • Dec 10-Yr futures (TY) down 5/32 at 130-17.5 (L: 130-14.5 / H: 130-22.5).
  • A few countervailing factors overnight: stimulative Japan fiscal outlook post-elections pressured FI in Asia, outweighing soft China PMI data.
  • We get final PMI at 0945ET, followed by ISM Manufacturing at 1000ET, alongside construction spending.
  • In supply: $102B combined in 13-/26-week bill auctions at 1130ET.
  • NY Fed buys ~$2.025B of 22.5-30Y Tsys.

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