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US TSYS/SUPPLY

Review 10Y Auction: 3.3Bp Tail, Tsys Sell-Off

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Falters Ahead of Key Resistance

US TSYS/SUPPLY

WI 10Y

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JPM Re-Enter Short GBP/USD View, Initiate Long USD/NOK

FOREX
  • On GBP, they write that dovish elements stand out from the BoE decision, with 75bps hikes not the base case for future meetings. This argues the case for further divergence between the US and BoE. They add that cable is high beta cyclical G10 currency and has relevant event risk to come, including the revised OBR date on Nov 17.
  • On NOK, they write that Norges Bank have bought into the Fed pivot narrative and NOK screens modestly rich vs EUR when adjusted for rate differentials and energy prices. A long USD/NOK trade plays both JPM’s bearish EUR/USD view and NOK weakness appears most appropriate. Additionally, NOK’s carry profile is weak in light of its high beta status, with a USDNOK long providing positive carry and a defensive position to a global growth slowdown. This may be compounded by seasonal headwinds, with November the strongest month for USDNOK.
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  • On GBP, they write that dovish elements stand out from the BoE decision, with 75bps hikes not the base case for future meetings. This argues the case for further divergence between the US and BoE. They add that cable is high beta cyclical G10 currency and has relevant event risk to come, including the revised OBR date on Nov 17.
  • On NOK, they write that Norges Bank have bought into the Fed pivot narrative and NOK screens modestly rich vs EUR when adjusted for rate differentials and energy prices. A long USD/NOK trade plays both JPM’s bearish EUR/USD view and NOK weakness appears most appropriate. Additionally, NOK’s carry profile is weak in light of its high beta status, with a USDNOK long providing positive carry and a defensive position to a global growth slowdown. This may be compounded by seasonal headwinds, with November the strongest month for USDNOK.