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EURJPY TECHS

Vulnerable Despite Recent Bounce

USDJPY TECHS

Probes Key Short-Term Support

US TSY FLOWS

Selling Into Late Session Bounce

US OUTLOOK/OPINION

Citi See Softer Payrolls But Quick Drop In U/E Rate

US TSYS

Tactical Plays For Potential Accelerated Taper

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Tysy saw minimal reaction to the Fed minutes, with moves instead coming earlier in the day after a hawkish surprise from one of the more dovish Fed members, Daly.


  • Tsys had very little reaction to the Fed minutes, as the fact that some members supported faster tapering was usurped by Daly earlier indicating her bar for accelerating taper is low.
  • This saw a twist flattening after the earlier sell-off into US data. 2Y yield is +2.6bps at 0.640%, 5Y is +0.2bps at 1.341%, 10Y is -2.1bps at 1.644% and the 30% is -5.1bps at 1.972%.
  • TYZ1 has picked up from earlier session/month lows and is back at 129-27 on low volumes. It steered clear of any test of nearby support at 129-03 (50% of the Oct'18 - Mar'20 bull cycle) but equally is some way from the key short-term resistance level of 131-08.
  • Demand for the Fed's o/n reverse repo facility fell by the most since Nov 1, to $1.453T from $1.572T yesterday, more than the $50B flagged beforehand by Wrightson ICAP from GSEs exiting the market.
  • It's Thanksgiving tomorrow with no US data/auctions for the rest of the week. Cash Tsys will close early on Friday at 1315ET/1815GMT.