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Curve Bull Steepens; BOJ, NFP In View

US TSYS

TYM3 deals at 111-22+, +0-07, after a show through Thursday's late high.

  • Cash Tsys finished 4-20bps richer on Thursday, as the curve bull steepened.
  • Tsys initially firmed in lieu of weaker than expected U.S. labour market data.
  • Weakness in U.S. equities then triggered a second round bid, with that move centered on worry re: the U.S. bank sector. Short positioning will have exacerbated the bid further as participants look ahead to the impending NFP print.
  • There was brief pressure as the latest 30-year auction marginally tailed, however an above average bid/cover and indirect take up were observed.
  • In OIS markets pricing for the Fed terminal rate fell ~15bps to 5.54%, with the aforementioned soft labour market data and equity weakness also at the fore there.
  • The latest monetary policy decision from the BOJ headlines in Asia-Pac hours. Further out Feb NFP provides today's highlight, our preview is here.

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