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Leaning Bear Steeper Ahead Of BoE And Hawkish Fed Speakers


Treasuries have retraced Wednesday afternoon's post-20Y auction rebound in overnight trade Thursday, eyeing varied data and Fed speakers ahead.

  • TY futures have dipped in sympathy with trans-Atlantic counterparts on a packed European central bank decision day (SNB hiked 25bp in line with survey, Norges Bank 50bp vs 25bp expected, BoE decision at 0700ET).
  • That said, trade has been thinned overnight by Asian holidays (TYU3 volumes <150k). The curve leans bear steeper, with 2Y yields +2.2bp, 10Y+3.3bp.
  • Atlanta Fed Pres Bostic told MNI yesterday he's prepared to hold rates through end-2024, but would be willing to tighten further if inflation proves more stubborn than he expects.
  • Hawks Bowman/Mester at 1000ET are arguably the FedSpeak highlight today, even as Powell simultaneously makes his 2nd day Congressional appearance (which is usually a non-event). Barkin appears after the close.
  • Weekly jobless claims highlight 0830ET data releases (also current account and Chicago Fed National Activity readings), with existing home sales and the leading economic index at 1000ET and KC Fed manufacturing at 1130ET.
  • In supply: $19B 5Y TIPS re-open and large bill auctions ($70B 4W, $60B 8W), preceded by announcements on 6W/13W/26W bills and the final coupon sales of the month (2Y/5Y/7Y/2Y FRN).

Latest levels:

  • The 2-Yr yield is up 2.2bps at 4.7372%, 5-Yr is up 2.5bps at 3.9816%, 10-Yr is up 3.3bps at 3.7519%, and 30-Yr is up 2.5bps at 3.8322%.
  • Sep 10-Yr futures (TY) down 7.5/32 at 113-2.5 (L: 113-1 / H: 113-10)

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