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Modest Risk-On

US TSYS
  • Cash Treasuries have sold off modestly as equities firm, after slight fluctuations overnight on mixed China Covid-related headlines with Shanghai starting to ease some lockdown restrictions but fresh restrictions elsewhere.
  • 2YY +2.3bps at 2.631%, 5YY +2.2bps at 2.862%, 10YY +2.7bps at 2.864% and 30YY +2.2bps at 3.071% in only a minor retracement of the past two days of rallies.
  • TYM2 sits 3 ticks lower at 119-19+, in a tight range on below average volumes. Initial resistance is formed at yesterday’s high of 120-10, shortly followed by the important short-term level of 120-18+ (Apr 27 high) but the trend direction is still down.
  • Particularly light docket with only Bullard’s FOX Business interview at 1300ET, leaving unscheduled headlines likely drivers for the session.
  • No issuance. Next note issuance not until Tuesday with $47B of 2Y.

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