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Limited Treasury Rally Supported By China TSF Disappointment

  • After a quiet session through European hours, cash Tsys see a rally broadly across the key benchmarks on the significantly smaller than expected increase in China aggregate funding led by new yuan loans, impacting risk sentiment more broadly, although the move has partly retraced.
  • 2YY -2bps at 3.199%, 5YY -1.7bps at 2.970%, 10YY -2.2bps at 2.866% and 30YY -2.1bps at 3.133% but 20Y bucks the trend with -3.7bps.
  • TYU2 trades 5 ticks higher at 119-08, towards the low end of yesterday’s range on above average but still low summer volumes. The recent break of trendline resistance at 119-16 suggests a deeper retracement is likely near-term , opening 118-05 a Fibo retracement of the Jun 14 – Aug 2 bull cycle.
  • Fedspeak: Barkin (’24 voter) speaks on CNBC interview at 1000ET
  • Data: U.Mich consumer sentiment/inflation expectations in focus at 1000ET, with monthly international trade prices beforehand at 0830ET.
  • No issuance

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