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Light Twist Flattening Observed As Asian Inputs Absorbed

US TSYS

Tsys have been subjected to some light twist flattening, albeit within contained ranges, leaving the major cash benchmarks running 2bp cheaper to 0.5bp richer, pivoting around the 10- to 20-Year zone. TYU3 sits in the middle of a narrow 0-04 range, +0-07+ vs. settlement.

  • Continued speculation surrounding potential Chinese policy easing, soft Chinese trade data and a weaker session for Japanese equities (with no clear catalyst) provided the overnight highlights.
  • FOMC-dated OIS shows ~5bp of tightening for next week, ~18bp of cumulative tightening through July, before ~29bp of cuts are priced by year end.
  • Only lower tier U.S. data is due during NY hours, while the latest BoC monetary policy decision could provide some influence from north of the border.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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