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Long End Tsys Lead Curve Cheaper, BBDXY Off Lows


The 0.1ppt uptick in 5- to 10-Year inflation expectations in the final U.S. Dec UoM sentiment survey allows the durable goods data-inspired move away from best levels to extend in Tsys, even with new home sales coming in well below broader expectations.

  • Cash Tsy yields run 0.5bp lower to 2bp higher on the day as a result, twist steepening, while TYH4 is -0-02 at 112-19+, 0-01+ off its Asia-Pac low.
  • That combination weighs on equities, while helping the broader BBDXY away from session lows.
  • A reminder that pre-holiday trading conditions and curtailed trading hours could be exacerbating moves here.
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