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Core CPI Gained, 30Y Bond Reopen Tailed

  • Tsys have fallen back to early Monday levels Thursday, curves bear steepening in the minutes following a poorly received 30Y Bond auction re-open that tailed 3.5bp.
  • Heavy volumes after the bell (TYZ3 near 2M), Dec'23 10Y futures at 107-10 (-20) still well above initial technical support of 106-14 (2.0% Lower Bollinger Band), 10Y Yield 4.6928% (+.1345) after tapping 4.7261% high after the Bond sale.
  • Busy early session as Tsys gapped higher in the seconds PRIOR to the data release (TYZ3 108-16 high) just as quickly reversed/extended lows after U.S. CPI rose 0.396% in September and 3.7% from a year ago, the Bureau of Labor Statistics reported Thursday, a tenth higher than markets expected.
  • Meanwhile core CPI added 0.323% and 4.1% over the month and year, respectively, in line with expectations. The three-month annualized rate for core CPI rose to 3.1% in September from 2.4% the previous month.
  • Curves reversed flatter profiles - gapped steeper immediately after the $20B 30Y bond auction tailed 3.5bp (4.837% high yield vs. 4.802% WI). 3M10Y currently +12.906 at -82.121 vs. -99.763 low; 2Y10Y +5.635 at 37.134 vs. -48.359; 5Y10Y +3.154 at -37.811 vs. -45.133 low.
  • Friday Data Calendar: Import/Export Prices, UofM Sentiment, Philly Fed Harker will present his 2023 economic outlook (text, Q&A) at 0900ET.

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