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Narrow Ranges As FOMC About To Get Underway

US TSYS SUMMARY

Another overnight session, another fairly narrow trading range (4.5 ticks on TYZ0, <150k volume). A bit of weakness as equity futures have ascended to session highs (S&P eminis +0.6%) and the dollar retraces (DXY -0.2%) - largely on the back of good Chinese econ data overnight.

Dec 10-Yr futures (TY) down 3/32 at 139-15.5 (L: 139-14.5 / H: 139-19). Moderate bear steepening in the cash curve: 2-Yr yield is up 0.2bps at 0.139%, 5-Yr is up 0.3bps at 0.2675%, 10-Yr is up 1bps at 0.6821%, and 30-Yr is up 2bps at 1.4317%.

The 2-day FOMC meeting gets started this morning - we put out our preview yesterday (contact us if you haven't seen it).

Data today: 0830ET sees Sep Empire Manuf. and Aug Import Prices; 0915ET sees Aug Ind. Prod.

Though unlikely to be a major breakthrough in the fiscal stalemate, moderate Democrats and Republicans in the House "Problem Solvers Caucus" are set to announce a $1.5T COVID stimulus compromise at 1100ET.

In supply, at 1130ET we get $60B in 42-/119-day bills; 1300ET sees 20-Yr bond re-open for $22B. NY Fed buys ~$2.425B in 1-7.5Yr TIPS.

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