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Minor Twist Flattening On Fed, Omicron

US TSYS
  • Cash Tsys have seen a minor twist flattening this morning, as prospects for a hawkish FOMC on Wednesday conflict with concerns surrounding Omicron.
  • 2Y yields are +1.0bp at 0.665%, 5Y +0.2bps at 1.252%, 10Y -1.0bp at 1.473% and 30Y -1.6bps at 1.862%.
  • TYH2 futures have edged higher since open to 130-13+, well within Friday’s range. First support is seen at 129-31 (Dec 8 low) whilst on the upside, clearance of 131-16 would reinstate a bullish outlook.
  • Biden is scheduled to meet with Sen. Manchin as early as today to discuss Build Back Better.
  • No data today.
  • NY Fed buy-op: Tsy 22.5Y-30Y, appr $1.600B (1030ET).
  • Solely bill issuance today with $57B 13W and $51B 26W Bill auctions (1130ET).

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