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Equity Rally Weighing On Tsys

US TSYS SUMMARY

Treasuries are turning lower as equity futures rally (S&P futures touching best levels since Sep 18) and the dollar weakens.

  • Light volume though (~150k TYZ0 traded as of 0630ET), with not much re headlines driving in the Asia-Pac session. Stronger stocks (Brexit talks optimism, plus rethinking pessimism on bank equities) have helped reassert gravity in the European morning, Tsy futures near session lows.
  • Dec 10-Yr futures (TY) down 3.5/32 at 139-17 (L: 139-16.5 / H: 139-21). The 2-Yr yield is up 0.2bps at 0.1309%, 5-Yr is up 0.5bps at 0.272%, 10-Yr is up 1.5bps at 0.6692%, and 30-Yr is up 2.1bps at 1.4213%.
  • A fairly quiet start to the week's calendar: 1030ET sees Sep Dallas Fed index. At 1400ET Cleveland Fed's Mester speaks.
  • Attention is very much on Tuesday's Trump-Biden presidential debate, with the election just over a month away.
  • In supply, only Bills today: $105B of 13-/26-week bill auction at 1130ET.
  • NY Fed releases its next schedule of purchases at 1500ET; today the bank buys appr $1.750B of 20Y-30Y Tsys.

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