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Flatter Still Overnight, Month-End Flows Eyed

US TSYS

The Tsy curve flattened further overnight, with yields now 0.8-3.0bp richer across the cash curve. Little of note on the headline front points to a willingness to follow out-of-timezone moves on the part of Asia-Pac participants, or perhaps month-end rebalancing flows/extensions kicking in. The space was largely immune to the equity space's recovery from lows on Thursday, and was also happy to look through strong earnings data from the mega cap tech names.

  • T-Notes through yesterday's high, last +0-05 at 140-05+, 10s through the recent range lows in yield terms.
  • On the flow side, downside focus was in play overnight, with 2x 10K lifts of the TYZ0 138.50 puts, first at 0-41, then at 0-39.• Fiscal negotiations are ongoing in DC, although U.S. Tsy Secretary Mnuchin has noted that some pretty wide differences remain. Talks are set to continue on both Friday and Saturday.
  • Monthly PCE data and the MNI Chicago PMI survey headline locally on Friday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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