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Dollar Supported By Sticky Real Yields Whilst Breakevens Crank Lower

US
  • In a ramped-up version of moves seen yesterday, the 6bp decline in nominal 10Y Tsy yields has been completely carried by a lower breakeven.
  • The 10Y breakeven of 2.41% is off a fleeting low of 2.37% but aside from that is the lowest since early Feb, having fallen more than 20bps from Monday’s intraday high.
  • Meanwhile, real yields sit at 69bps, up more than 10bps since early Monday levels and the highest since Mar-2019 when excluding the fervour just before and after the June FOMC, supporting the dollar in the process.

US 10Y breakeven slides (yellow) and real yields hold firm (green)Source: Bloomberg

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  • In a ramped-up version of moves seen yesterday, the 6bp decline in nominal 10Y Tsy yields has been completely carried by a lower breakeven.
  • The 10Y breakeven of 2.41% is off a fleeting low of 2.37% but aside from that is the lowest since early Feb, having fallen more than 20bps from Monday’s intraday high.
  • Meanwhile, real yields sit at 69bps, up more than 10bps since early Monday levels and the highest since Mar-2019 when excluding the fervour just before and after the June FOMC, supporting the dollar in the process.

US 10Y breakeven slides (yellow) and real yields hold firm (green)Source: Bloomberg