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Overnight Weakness Reverses, Fed Speakers And 20Y Supply Eyed

US TSYS

Treasuries set fresh lows in Asia-Pac trade but have since bounced back to largely unchanged overnight Wednesday.

  • The 2-Yr yield is down 0.2bps at 0.3935%, 5-Yr is down 0.8bps at 1.1538%, 10-Yr is up 0bps at 1.6373%, and 30-Yr is up 1bps at 2.0947%.
  • Overnight losses (10Y yields touched a fresh post-May high of 1.6707%) followed through from Tuesday; some factors weighing early included weakness in Aussie bonds, White House optimism over a fiscal package deal, and headlines signaling diminished odds of a PBOC RRR cut.
  • Plenty of Fed communications today, including the last scheduled pre-Nov meeting blackout period appearances by Bostic/Kashkari/Evans/Bullard who are on a panel at 1200ET, and Gov Quarles who's speaking on the economic outlook at 1300ET.
  • Also, the Fed releases its latest Beige Book at 1400ET.
  • In supply, at 1300, Tsy sells $24B in 20Y Bond (earlier at 1130ET, $100B combined in 27-day and 119-day bills).
  • In data, we get weekly MBA mortgage applications at 0700ET.
  • NY Fed buys ~$3.225B of 7-10Y Tsys.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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