Market Roundup: GBP Reverses Course, Bonds Hammered

Tsys quickly reversed overnight gains after the NY open, bonds extending lows after midday, yield curves bear steepening with 2s outperforming: 2s10s +9.317 at -33.602 -- back to mid September levels after the spd extended inversion to new low of -57.943 pre-FOMC.

• Tsy 2YY currently -.0350 at 4.3056%, 30YY +.0943 at 3.8342%. while 10YY +.0391 at 3.9635% -- for a gain of 235bp already this year - more than any full year since 1962!
• Tsy futures initially scaled back gains following in-line to better than expected Durable Goods data (-0.2% vs. -0.3% est; ex-trans in line at 0.2%), Cap Goods +1.3% vs. +0.2% est.
  
• Surge in Aug new home sales (+28.8% to .685M SAAR), coupled with rise in consumer confidence to 108.0 vs. 104.6 est. spurred renewed selling in 5s-30s. Technical selling in TYZ2 as futures drop through first support of 111-00+ (Low Sep 26) to 110-27, next key support: 110-13+ 3.0% 10-dma envelope to 110.
• Session's Fed speak didn't really cover any new ground, while the BoE lead economist Pill comments did little to calm markets as short end Gilts priced in additional 250bp in hikes by year end! GBP knocked lower in early afternoon trade to 1.0687 -.0002.
• Cross asset snapshot: stocks reversed early gains (SPX -23.0 at 3647.0), Crude higher (WTI +1.25 at 77.96), Gold higher +9.14 1631.5.