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Bonds New Lows, Decoupling From Weaker Stocks

US TSY FLOWS

Bonds extending session lows last few minutes (30YY 1.8416% high), even as equities holding weaker (ESH2 -75.0 at 4535.0), decoupling again after brief period negative correlation late last week.
Curves steeper, short end outperforming: Trading desks reporting two-way flow in short end with leveraged fund buying vs. foreign real$ selling 2s, leveraged$ selling 5s, real$ selling 20s ($20B 20Y Bond sale Tuesday, 912810TC2). Sporadic flattener unwinds 2s10s, 5s and 10s vs. 30s. Current yield levels:

  • 3M10Y -1.016, 134.376 (L: 129.551 / H: 135.646)
  • 2Y10Y +1.704, 77.746 (L: 74.392 / H: 78.591)
  • 2Y30Y +4.708, 121.185 (L: 115.032 / H: 122.811)
  • 5Y30Y +5.429, 68.415 (L: 62.898 / H: 70.244)

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