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Mkt Roundup: Curves Marching Steeper

US TSYS
Tsy yield curves continued to march off early week inverted lows Thursday, 2s and 5s outperforming weaker 10s-30s day after the March FOMC minute outlined factors for coming balance sheet drawdown (as early as May) and willingness to hike 50bp if needed to get inflation under control.
  • Nothing really new from StL Fed Bullard comments on economy/monetary policy this morning, save perhaps that current policy is "about 300bp too low", and stresses importance of taking recession red flag yield curve inversions seriously.
  • Currently, 2s10s nearly 30bp off Sunday evening inverted low of -9.531 at +19.096 while 3s, 5s and 7s remain inverted, albeit off lows, vs. 10s (-0.167, -0.4.482, -7.225 respectively).
  • At 120-26.5 (+4.5) June 10Y futures remain above key support of 120-04+ (Low Dec 12/13 2018, cont); if yields continue to rise -- opens next key psychological support of 120-00. Weaker June 30Y Bonds (USM2) off midmorning lows at 145-00 (-14), 30YY at 2.6669 (+.0409) vs. 2.7010% high.
  • Little react to lower than est weekly claims: 166k vs. 200k, markets back to watching geopol headline risk (no progress in resolving Russia war in Ukraine)
  • Current cross asset: West Texas Crude (WTI) +$1.48 (1.54%) at $97.77; Gold +$8.1 (0.42%) at $1933.34.

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