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Modestly Cheaper With Claims and 7Y Supply On The Docket

US TSYS
  • Cash Tsys trade 1.5-2bp cheaper, led by 7-10s, as they chip away at yesterday’s sizeable rally that was linked to broader moves including oil pulling lower rather than any specific data/headlines.
  • Flow has helped the cheapening pressure amidst little new headlines and subdued futures volumes. Jobless claims headline today’s data before 7Y supply after yesterday’s well-received 5Y auction.
  • TYH4 at 113-05 trades close to earlier lows of 113-03 under subdued volumes of 175k. It only modestly pulls back from yesterday’s 113-12 high which stopped fractionally short of resistance at 113-12+ (Fibo projection of Oct-Nov price swing) after which lies the round 114-00.
  • Data: Weekly jobless claims (0830ET), Goods trade balance Nov adv (0830ET), Wholesale/retail inventories Nov p/Nov (0830ET), Pending home sales Nov (1000ET)
  • Note/bond issuance: US Tsy $40B 7Y Note auction (91282CJQ5) – 1300ET
  • Bill issuance: US Tsy $80B 4W and 8W Bill auctions – 1130ET

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