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Bull Steepening Post Minutes

US TSYS
  • Cash Tsys have rallied on the day in a move that started after the initial sell-off on yesterday’s FOMC minutes, which laid out likely plans for a monthly cap on runoff rising to $95B ($60B Tsy, $35B MBS) phased in “over a period of three months or modestly longer.”
  • 2YY -3.2bps at 2.439%, 5YY -2.7bps at 2.655%, 10YY -1.3bps at 2.585%, 30YY -0.1bps at 2.625%. The modest bull steepening sees 2s10s up to new recent highs of 15bps.
  • TYM2 is up 8+ ticks at 120-30+ on average volumes. Despite the rise, the downtrend is seen intact with support at 120-04+ (continuation of the low from Dec 12/13, 2018) which it nearly tested yesterday, whilst resistance is at 122-10 (Apr 5 high) after large moves of late.
  • Fedspeak: Bullard (2022 voter) with text + Q&A at 0900ET before Bostic (2024) & Evans (2023) on inclusive employment.
  • Bill issuance: US Tsy $35B 4W, $30B 8W bill auctions at 1130ET.

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