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Futures Halt Gains Amid Rebound In Chinese Equities

US TSYS

Initial topside impetus moderated as T-Notes topped out at 109-29+ and stabilised just shy of that level. E-mini futures oscillated between gains and losses amid heightened volatility in China's equity markets, staging an about-face after a spell of early-doors weakness. The ongoing debate on Fed terminal rate level may have factored into the price action, although swaps market pricing was little changed.

  • There was little in the way of FI-specific headline flow in Asia-Pac hours, but regional players digested Monday's surge in gilts, stemming from the promise of stabilisation in UK political landscape.
  • When this is being typed, T-Notes trade +0-04 at 109-27+, while Eurodollars trade -0.5 to +1.5 tick through the reds.
  • Cash curve sits lower and runs flatter, with yields last seen 0.6-3.3bp as 10s outperform. The marginal tightening in 5-Year/30-Year Tsy yield spread brought it close to the breakeven level.
  • Local data highlights today include Conf. Board Consumer Confidence & Richmond Fed M'fing Index, while Fed's Waller will speak at a conference in Las Vegas. Also coming up is an auction of 2-Year Tsys.

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