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Market Roundup, Tracking EGBs Off Lows

US TSYS
Tsys pulling higher with with EGBs heading into the European close, yld curves off highs/mixed after bear steepening earlier. 10YY currently 3.9317% +.0176 vs. 3.9806% earlier - highest since November.
  • US FI mkts opened weaker following higher than expected inflation data for France and Spain overnight, see-sawed lows on spate mixed US data. Tsy futures ultimately rebounded off lows following drop in consumer confidence (102.9 vs. 106.0 prior) and weaker Chicago PMI (43.6 vs. 45.5 est.).
  • Corporate debt and option-tied hedging added to early pressure, while markets remain skittish ahead month end rebalancing expected to draw selling in stocks vs. FI.
  • STIR: Fed funds implied hike for Mar'23 at 30.1bp, May'23 cumulative 56.1bp to 5.138%, Jun'23 73.5bp to 5.312%, terminal at 5.40% in Oct'23, -1.5 from first-half highs.

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