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BTP TECHS

(U1) Needle Still Points North

ASIA RATES

China Repo Rates Creep Higher

GILT TECHS

(U1) Still Needs To Tackle Recent Highs

SCHATZ TECHS

(U1) Northbound

BOBL TECHS

(U1) Bullish Theme Dominates

BUND TECHS

(U1) Trend Conditions Remain Bullish

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Citi saw the June FOMC as hawkish per their expectations, with new forecasts justifying a hawkish dot shift

  • They saw the taper timeline as little changed (with a hint coming as early as July or Jackson Hole, w actual taper 4Q or 1Q 2022), but the language used at the meeting "does pose some risk of a slightly earlier and potentially faster pace of tapering once it occurs".
  • Powell sounded upbeat, noting upward price pressure from a rebound in spending and possibility that inflation could turn out higher than expected. This puts more weight on incoming inflation data.
  • Powell repeatedly noted we are likely to see strong job creation through summer/into fall, with a "very very strong" labor market 1-2 years out. He noted himself that the conditions for hikes will likely now be met sooner than expected.
  • The only dovish language was Powell downplaying the dots.