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FI Extends Rally on Lower Tsy Borrow Ests.

US TSYS
  • Tsy futures as well as stocks extending session highs (contract highs on latter) after the Treasury cut Jan-March borrow est's from $816B to $760B, and estimates April-June at $202bn. The refunding announcement is scheduled for Wednesday at 0830ET.
  • Mar'24 10Y futures (TYH4 tapped 111-23 high, +22) continues to see-saw near the top end of range since January 18. Initial technical resistance at 112-01+ (High Jan 17). 10Y yield slipped to 4.0568% low.
  • Focus remains on gradually lower inflation and timing of first FOMC rate cut since March 2020 in the lead up to this Wednesday's policy announcement. No action expected from the Fed Wednesday, but dealer estimates of when and by how much is varied (GS: 25bp cut in March, 5 total cuts in 2024 to 4.25%; DB 3.75% by year end, UBS 2.75% year end; flipside: Santander est's 50bp by year end to 5%).
  • Cross asset summary: stocks near recent highs (SPX eminis 4953.25 vs. Fri's 4956.0 contract high), Crude weaker (WTI -1001 at 77.01), gold firmer (+13.32 at 2031.84.

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