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Mildly Richer Awaiting US CPI

US TSYS
  • Cash Tsys trade mildly richer, 0.5-1.5bp across the curve with the front end underperforming, as they await US CPI which dominates today’s session. There is no Fedspeak scheduled nor any coupon-bearing issuance.
  • They sit between a slightly larger rally in EGBs and a sell-off for Gilts with the latter stemming from stronger UK wage growth.
  • TYH4 at 110-23+ trades towards the high of the day’s narrow ranges, with volumes on the light side as they approach 250k. It remains both within yesterday’s and Friday’s wider ranges, the latter after gyrations following annual CPI revisions. A bear threat is seen as still present with support at 110-16 (Dec 13/Feb 9 lows) whilst to the upside sits resistance at the 20-day EMA of 111-11.
  • Data: CPI Jan (0830ET) - preview here, Real average earnings Jan (0830ET)
  • Bill issuance: US Tsy $80B 42D CMB bill auction (1130ET)

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