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Late Session Update: What Sell-Off?

US TSY FUTURES
Tsys have quietly drifted back to near opening levels, 30Y Ultra-bonds continue to outperform - currently extending session highs (WNH3 +1-15 at 142-02), 30Y futures now modestly higher (USH3 +5 at 129-21).
  • Very short end bid EDZ2 +2.75 at 95.1625, Fed terminal at 4.92% in May'Jun'23, while 2023 still weaker as prospect for return of 75bp hike remains slightly elevated. Additionally, yield curves flatter, but off early wk inverted lows, 2s10s currently -4.587 at -77.298 (-78.456 low).
  • Quiet volumes in second half, continued sale unwind/buy support operating under the premise this morning's higher than expected Nov jobs gain of +263k (+200k est) not high enough to seriously dampen expectations of a step-down to 50bp hike at Dec 14 FOMC.
  • No unscheduled rebuttals from Fed speakers ahead tonight's policy blackout through Dec 15. Focus turns to next week Fri's Nov PPI, CPI the following week/day ahead FOMC annc.

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