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USDCAD TECHS

Bullish Price Structure Intact

AUDUSD TECHS

Needle Points South

US TSY OPTIONS

BLOCK, Huge 5Y Put Buy

EURJPY TECHS

Probes The Bear Trigger

USDJPY TECHS

Range Base Holds Firm

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Data-driven real-vol evaporated quickly early Wednesday, Tsys holding weaker levels on narrow range until an exceptionally strong 10Y Note auction stopped out just over 3bp spurred a sharp gap bid. Levels scaled back some post auction support to marginally mixed after the close.
  • Tsy futures surged after CPI Core miss (0.3% vs. 0.4% est), but just as quickly reverse (CPI MoM in-line with forecasted 0.5%) -- trading back near late overnight session lows. Volume surged on two-way flow, TYU >515k, yield curves bear steepened early.
  • Tsys reversed losses/surged higher after particularly strong 10Y Note auction stopped through just over 3.0bp through WI at auction cutoff with 1.340% high yield. Tsy 10Y yields fell to session low of 1.3000% before late session bounce to 1.3202%. 2.65x bid-to-cover well above five auction avg: 2.43x while indirect take-up surged to 77.25% vs. 61.16% 5M avg.
  • Fed speak was decidedly hawkish: Fed's George says 'Substantial Progress' already made; Dallas Fed Kaplan on CNBC (uber-hawk but non-voter) likes annc plan to taper at Sep FOMC, begin in October.
  • The 2-Yr yield is down 2bps at 0.2186%, 5-Yr is down 1.4bps at 0.8115%, 10-Yr is down 0.9bps at 1.3405%, and 30-Yr is up 0.6bps at 2.0048%.