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Near Session Highs Amid Risk-Off Undercurrents

US TSYS SUMMARY

Treasuries have benefited from a risk-off undercurrent in overnight trade Wednesday, with equities slipping and month-/quarter-end arriving.

  • Sep 10-Yr futures (TY) traded flat in Asia-Pac session, but now up 5/32 at 132-13.5 (L: 132-06 / H: 132-14). Gains began around 0400ET when Bild reported a Russian state-backed entity launched a cyberattack on the German banking system (European bank stocks weakened sharply). Some lingering concern on Delta COVID variant spread as well.
  • The 2-Yr yield is down 0.8bps at 0.2427%, 5-Yr is down 1.6bps at 0.8734%, 10-Yr is down 1.5bps at 1.4545%, and 30-Yr is down 1.7bps at 2.0667%.
  • Data today includes weekly MBA mortgage applications (0700ET), Jun ADP Employment (0815ET), MNI Chicago Business Barometer (0945ET), and May pending home sales (1000ET).
  • We hear again from Atlanta Fed's Bostic (0800ET) and Richmond's Barkin (1300ET).
  • Only supply is $35B 119-day bill auction at 1130ET. NY Fed buys ~$3.225B of 7Y-10Y Tsys.

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