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Cheapening Further Fuelled By ISM Serv, No BoE Take-Up

US TSYS
  • Tsys cheapen further on relative ISM strength and the additional nudge from no take-up in BoE long-dated gilt purchase operations.
  • Most benchmark tenors have now retraced the rally seen since the start of the US session Monday, with 2YY +9.5bp on the day lagging larger increases across the curve, led by 7YY +15bps, as real yields reverse the sharp decline earlier in the week (10Y real +15bp).
  • TYZ2 trades 1-06 lower at 112-10 but still with room to fall further before next support at 111-20+ (Sep 29 low).

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