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BMO Like 2s/10s Flatteners

US TSYS

BMO note that Tuesday’s 10-Year auction “resulted in the largest tail since 2011 as primary market participants were unwilling to pay up for 10s that went into the auction at the highs following CPI. While the indirect allocation was below average, the generally in line bidding statistics spoke more to the headline result being a function of the intraday price action rather than any material stepback in bidding interest. We’ll characterize the steepening follow through to supply as a good opportunity to re-enter a 2s/10s flattener, with an initial target of 15bp.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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