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Holding Sharply Richer After Late Open

US TSYS
  • Cash Tsys trade sharply richer from Friday levels, clawing back Friday’s holiday thinned sell-off by rallying almost continuously from the late open (Tokyo holiday) aside from a most recent small cheapening. Spillover from lower German regional CPI readings might have helped extend the rally but details indicate this was led by household energy with a chance that core inflation firmed.
  • 2YY -7bp at 4.355%, 5YY -11.2bp at 3.892%, 10YY -12.3bp at 3.752% and 30YY -10.6bp at 3.857%, with the result flattening in 2s10s to lows since Dec 20 at -60bps.
  • TYH3 trades 20 ticks higher at 112-29+ off a session high of 113-02, coming close to fully unwinding the post-Christmas cheapening.
  • Data: S&P Global Mfg PMI, Dec final (0945ET), Construction spending, Nov (1000ET)
  • Bill issuance: US Tsy $54B 13W, $45B 26W bill auctions (1130ET)

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