Leaning On EGBs & Gilts For Support, 2-/10-Year Curve Inverts Further

U.S. Tsys consolidate just shy of best levels at typing, akin to the moves in EGBs & Gilts, after the softer than expected round of Eurozone & UK PMIs allowed the space to more than reverse the cheapening away from Asia-Pac bests seen ahead of the data. The previously alluded to UXY block trade (+1,750) has helped to underpin the space in recent dealing.

• The major benchmarks are 3-6bp richer (lagging the move in EGBs & Gilts), with the 7- to 10-Year zone outperforming. TYU3 is +0-13, 0-02+ off the peak of its 0-17 session range.
• The 2-/10-Year yield curve has registered a new post-SVB meltdown low, with the 5-/30-Year curve operating just off its own post-SVB extreme.
• FOMC-dated OIS shows a cumulative ~27bp of tightening through November, followed by pricing of ~20bp of cuts through January.
• Comments from Cleveland Fed President Mester (’24 voter) and St. Louis Fed President Bullard (’25 voter), as well as flash S&P Global PMI data, headline the U.S. docket today.