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Markets Roundup: Exogenous Risk, Deal Tied Hedging Weigh on Tsys

US TSYS
  • Treasury futures are trading mildly weaker again, back near the middle of the session range. Treasury futures quickly reversed early session gains, rising yields partially tied to Hong Kong real estate developer/services company Country Garden's sell-off post MS downgrade overnight.
  • Rate lock hedges vs. Bank of America $5B debt issued in 2s and 3s added to curve flattening (2Y10Y -3.262 at -77.717) pressure in the front end (total of $9B high grade corporate debt to price Monday).
  • No data or Fed speakers Monday, data resumes Tuesday with Retail Sales, import/export index and TIC flows. Minutes for July FOMC this Wednesday.
  • Meanwhile, according to Punchbowl, “House Republicans have a conference call tonight at [18:00 ET 23:00 BST] to discuss FY2024 government funding, the thorniest issue they’ll face this fall [and] Speaker Kevin McCarthy [R-CA] is hosting his annual retreat in Jackson Hole, Wyo., this week.”

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