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Belly-Led Rally On Contractionary Eurozone PMIs

US TSYS
  • Treasuries firm as European growth fears from contractionary PMIs add to yesterday's US data misses (including a soft Philly Fed), with gains unsurprisingly led by the belly against that backdrop. The Eurozone service PMI touched at a 15-month low of 50.6 and mfg a 25-month low of 49.6, whilst the manufacturing output measure that feeds into the composite fell even further below 50 at 46.1.
  • 2YY -4.6bps at 3.039%, 5YY -6.3bps at 2.919%, 10YY -5.5bps at 2.820% and 30YY -2.6bps at 3.106%.
  • TYU2 trades 22+ ticks higher at 119-19+ on strong overnight volumes. It easily clears resistance at 119-06 (Jul 13 high) and opens the bull trigger at 120-16+ (Jul 6 high).
  • Data: S&P Global Mfg, Service & Composite PMI, July prelim. (0945ET)
  • No issuance

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