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Belly Underperforming As Cash Trade Resumes

US TSYS

The belly of the Tsy curve is underperforming Friday in the return of cash trading following Thursday's holiday, catching up to movement in futures.

  • 5Y yields hit post-pandemic highs (1.2617%) upon reopening of trade, retraced to 1.2358% by the European open, and have since climbed back up ~2bp. No particular headline drivers overnight.
  • Latest levels: 2-Yr yield is up 2.9bps at 0.5416%, 5-Yr is up 4.1bps at 1.257%, 10-Yr is up 3.1bps at 1.5801%, and 30-Yr is up 2.3bps at 1.9225%.
  • Dec 10-Yr futures (TY) up 2/32 at 130-12.5 (L: 130-10 / H: 130-18.5), within Thursday's narrow range and on unremarkable volumes (~290k).
  • The last data releases of the week are at 1000ET: September JOLTS and prelim UMichigan sentiment.
  • NY Fed Pres Williams at 1210ET is the only scheduled FOMC speaker.
  • There's no supply today. And no NY Fed operational purchases - though we get the next release schedule at 1500ET, which will reflect last week's asset purchase tapering decision.

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