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Block Sale In TU Allows Early Bull Steepening To Unwind


U.S. Tsys have been a little more reluctant to turn bid (when compared to core European & UK peers) in lieu of the latest round of regional CPI data out of Germany.

  • A block sale of TU futures (-3.377K) will have caped the bid in the front end of the curve to some degree, with the broader space operating at or a little shy of best levels that came in lieu of the softer than expected NRW CPI print from Germany & downside surprise in French CPI.
  • Cash Tsys run 2.5-4.0bp richer, with intermediates now outperforming after the early round of bull steepening was broken, aided by the aforementioned TU block.
  • TYU3 sits +0-10+, 0-03 off the peak of its 0-14+ range.
  • FOMC-dated OIS shows 24bp of tightening priced for the July gathering, with 40bp of cuts then showing by year-end, in line with early London levels.
  • Short-end flow has been dominated by a 2.5K block steepener in the SFRZ3/Z5 spread.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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