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Markets Roundup: New 16Y High Yield Ahead 5Y Auction

US TSYS
  • Treasury futures trading moderately weaker, 10Y through round number support to new low of 107-26.5 (-9) while 10Y yield extend to new 16Y high of 4.5910% in the lead up to the Tsy $49B 5Y note auction.
  • Curves bear steepening again, 3M10Y +5.388 to -100.723, 2Y10Y +5.984 at -52.958 (steepest since mid-May 2023).
  • Rates actually extended highs after Core durable goods orders came out stronger than expected in August preliminary data, rising 0.9% M/M (cons 0.1) but with the gloss taken off by a sizeable downward revision to -0.4% M/M (initial 0.1) in July.
  • Little reaction to MN Fed President Kashkari making the rounds again this morning (CNN, CNBC), reprising higher for long stance if inflation persists: "holding rates through 2024" (despite dots showing a cut next year).
  • Cross asset summary: Greenback near moving higher (DXY +.469 at 106.700), Gold weaker (-23.30 at 1877.35), crude broadly higher (WTI +3.40 at 93.79) and stocks trade weaker after stronger open: DJIA is down 169.04 points (-0.5%) at 33449.54, S&P E-Mini Future down 17 points (-0.39%) at 4297.5, Nasdaq down 38.8 points (-0.3%) at 13024.36.

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