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Extend Low End Narrow Range

US TSY FUTURES
  • Mildly weaker Treasury futures extend bottom end of narrow session range in the last few minutes, TYZ3 marks 109-22.5 low (-2), curves mixed (3M10Y +1.285 at -115.917, 2Y10Y -2.306 -72.770).
  • Trade volumes pick up slightly after a slow start to the session, TYM3 just over 405k. Corporate deal-tied hedging and pre-auction short sets ahead today's $35B 10Y Note re-open sale adding to pressure in 2s-10s.
  • Technicals: The recent move lower signals the end of the corrective recovery between Aug 22 - Sep 1 and a key resistance has been defined at 111-12+, the Sep 1 high. Moving average studies continue to highlight a medium-term downtrend. An extension lower would signal scope for 109-09+, Aug 22 low and a bear trigger. A break of this level would strengthen a bearish theme.

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