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Curve Steepens on Thursday

US TSYS

TYU3 deals at 111-02+, +0-02, in line with late NY level.

  • Cash tsys finished 7-13bps cheaper across the major benchmarks, bear steepening was apparent.
  • Tsys were pressured after US GDP printed at 2.4% Q/Q firmer than the expected 1.8%. Losses extended to session lows as a Nikkei report surfaced noting that the tweaking Yield Curve Control will be discussed at today's BOJ meeting.
  • Earlier in the session spillover from EGB's, in lieu of a cautious ECB, pressured Tsys.
  • The latest 7-Year auction tailed, a weaker than average bid/cover and soft indirect take up were observed.
  • In Asia today the highlight is provided by the BOJ monetary policy decision. Further out we have US consumer income, employment cost index and University of Michigan consumer sentiment.

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