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Paring Housing Starts-Induced Losses

US TSYS
  • Cash Tsys have started to pare earlier losses, which had started before ahead of the 0830ET data and then continued with stronger than expected housing starts (despite aforementioned caveats including its volatility).
  • Barkin (’24 voter) so far has kept his cards close to his chest in his first appearance since Wednesday’s FOMC decision as opposed to some of his FOMC colleagues in recent days.
  • The curve trades 0.5-2bp richer, bull flattening with 2s10s of -52bps (-1bps) having pulled off an earlier -54bps that pushed nearer Friday’s low of -55bps.
  • TYH4 sits at 112-15 vs a pre-data high of 112-20+ but remains above overnight levels. Technical trends point to a bullish signal that highlights resistance at 112-28+ and 113-12+ (Fibo projection points), whilst support is seen at 111-31+ (Dec 14 low).

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