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Modest Paring Of Yesterday’s Sizeable Gains With Solid Docket Ahead

US TSYS
  • Cash Tsys trade between 0.5-3bp cheaper, bear steepening as the front-end leads the sell-off although with curve metrics distorted by yesterday’s new 2Y issue.
  • The moves mostly consolidate yesterday’s sizeable rally (primarily following EGBs and with Tsys continuing to catch up after 2Y and 5Y supply had been absorbed somewhat smoothly) ahead of a heavy docket with Fedspeak, multiple second tier data releases and supply from both 7Y paper and two bills ahead.
  • TYZ3 at 108-30 trades in the middle of the day’s range having touched a new recent high of 109-03+ in London trade. It marks another increase towards the bull trigger at 109-08+ (Nov 17/22 high).
  • Data: FHFA Home prices Sep (0900ET), S&P CoreLogic Home Prices Sep (0900ET), Conf Board consumer confidence Nov (1000ET), Richmond Fed mfg Nov (1000ET), Dallas Fed services Nov (1030ET)
  • Fedspeak: See separate below bullet for the schedule.
  • Note issuance: US to sell $39B 7-year notes (1300ET)
  • Bill issuance: US to sell $44B 52-week bills, $70B 42-Day CMBs (1130ET)

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