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Post-July FOMC Minutes React

US TSYS
  • Fast two-way trade as Treasury futuresextend lows then rebound.
  • Front month Sep'23 10Y futures mark 109-18 low (-6.5), trades 109-20 last. Initial technical support at 109-11.5 (Low Aug 15), followed by 109-10.5 (Low Nov 4 2022, cont). Below that, major technical support at 108-26. (Low Oct 21 2022, cont).
  • Curves maintain steeper profiles with short end rates outperforming, 3M10Y curve +3.623 at -121.248, 2Y10Y +2.312 at -72.447.
  • Rate hike projections through year end are steady to mildly higher, Sep 20 FOMC is 11% w/ implied rate change of +2.7bp to 5.356%. November cumulative of +10.6bp at 5.435, December cumulative of 9.1bp at 5.420%. Fed terminal holds at 5.43% in Nov'23.

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