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Off Lows, But Global Factors Maintain Pressure

US TSYS

Treasuries have partially recovered from overnight lows Wednesday but remain weaker, with bear steepening in the curve.

  • 10Y yields briefly pierced 1.57% for the first time since June. The 2-Yr yield is up 0.6bps at 0.2896%, 5-Yr is up 1.5bps at 0.9878%, 10-Yr is up 1.4bps at 1.5397%, and 30-Yr is up 1.5bps at 2.1104%.
  • Rising global energy prices (and concerns over central bank tightening/inflation) continue to take center-stage, with oil rising for the 4th straight session and European natural gas soaring to all-time highs.
  • That's helped weigh heavily on FI and equities, with the dollar pushing higher (incl a fresh 2021 high vs the Euro).
  • With the debt limit set to be a key focus in coming days, Pres Biden meets w business leaders at 1300ET on the topic, including bank CEOs. Senate Democrats set to try again to vote on the debt limit today.
  • In data, MBA Mortgage Apps at 0700ET, with ADP employment at 0815ET (as always, eyed ahead of Friday's payrolls numbers).
  • Tsy sells $70B combined in 64-/119-day bills at 1130ET. NY Fed buys ~$1.425B of 10-22.5Y Tsys.

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