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Post New Home Sale React: Extend Lows

US TSYS
  • Treasury futures extend weaker levels, bounce slightly after higher than expected New Home Sales (795k vs. 680k est, 676k prior/revised), MoM (+12.3% vs. 0.7% est, -8.2% prior/revised).
  • Dec'23 10Y futures trade 105-29.5 low (-14) - still above initial technical support of 105-10.5 (Oct 19 low). Curves hold steeper: 2Y10Y +9.923 at -19.400.
  • Projected rate hikes into early 2024 gain slightly: November holding at 1.6%, w/ implied rate change of +.4bp to 5.333%, December cumulative of 7.1bp at 5.399%, January 2024 cumulative 10.4bp at 5.432%, March 2024 at 6.5bp at 5.394%. Fed terminal at 5.438% in Jan'24. Fed terminal at 5.440% in Feb'24.

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