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JGB Cheapening Impulse Fuels Sell-Off, Jobless Claims In Focus Ahead

US TSYS
  • Cash Tsys trade 2.5-5bp cheaper, led by 7s, for a modest steepening in 2s10s space but leaving the -46bps well within yesterday’s range.
  • JGB impulses drove initial pressure, via perceptions of BoJ communique/policy normalization risks and a poorly received round of 30-Year JGB supply before softer-than-expected Germany IP data helped move away from best levels.
  • TYH4 at 110-29+ (-07) trades towards the lower end of the day’s range and remains with yesterday’s, with strong volumes of 465k. Support is seen at 109-16+ (20-day EMA) but the trend direction remains north with initial resistance at the intraday high of 111-09+ before 111-19 (Fibo projection of Oct-Nov price swings).
  • Data: Weekly jobless claims (0830ET) are likely to have more impact than yesterday’s modest miss for ADP. We also get Challenger Job Cuts for Nov (0730ET), Wholesale sales/inventories for Oct/Oct final (1000ET), household change in net worth Q3 (1200ET) and consumer credit Oct (1500ET)
  • Bill issuance: US Tsy $80B 4W, $80B 8W bill auctions (1130ET)

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