Off Highs Alongside Peers, Curve Twist Steepens

The early TY bid runs out of steam ahead of yesterday’s post-FOMC minutes high, last -0-02+ at 112-14, 0-03 off the base of its 0-08 range. A pullback from best levels in EGBs helped cap the rally.

• Cash Tsys twist steepen, with yields 2bp lower to 1bp higher across the curve.
• The space had benefitted from European CPI data prints and from the FOMC Dec meeting minutes noting that several participants “suggested that it would be appropriate for the Committee to begin to discuss the technical factors that would guide a decision to slow the pace of (balance sheet) runoff well before such a decision was reached in order to provide appropriate advance notice to the public.”
• FOMC-dated OIS shows ~149bp of cuts through ’24.
• ADP employment data, the weekly jobless claims prints and final S&P Global services PMI reading are due later today.