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Biased Cheaper & Steeper, Geopolitics Still Dominate


The lack of meaningful weekend escalation in the Israeli-Hamas conflict (although it seems to be a matter of time until we do see that, see earlier bullets for details) allows Tsys to ease further sway from Friday’s peak.

  • Medium-term liquidity injections from the PBoC (with an eye on government bond supply), as well as political headlines out of Europe & NZ, provided the highlights of the weekend news flow from elsewhere.
  • TYZ3 remains within the confines of Friday’s range, last -0-11+ at 107-11+, while cash Tsys are 2-8bp cheaper as the curve bear steepens.
  • FOMC-dated OIS currently indicate ~9.5bp of cumulative tightening through January, i.e. just under 40% odds of a further 25bp hike are priced. Beyond there, ~53bp of cuts are then showing through September ’24 vs. current terminal pricing levels.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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