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Holding A Little Richer, Debt Ceiling Dynamics To Dominate

US TSYS

Tsys are 1.5-2.5bp richer on the day in early London trade, with a light bull steepening bias apparent. Supportive cross-market impulses, derived from a well-received round of 20-Year JGB supply, allowed the space to build modestly on the incremental early Asia-Pac gains. TYM3 is 0-01+ off the peak of its 0-06+ range.

  • FOMC-dated OIS shows ~64bp of rate cuts from currently priced terminal rate levels.
  • 20-Year Tsy supply on the ongoing debt ceiling debate will garner the most interest today.
  • As a quick reminder, President Biden and Congressional leaders have flagged a degree of optimism re: the odds of a bipartisan debt ceiling deal being struck, although House Speaker McCarthy cautioned that the two sides are still far apart, alongside pointing to the potential for a deal to be struck by the end of the week. Staff level talks surrounding the matter have also received a makeover, while Biden has shortened his upcoming overseas trip to deal with the matter.
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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