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Pre/Post-Powell See-Saw Action

Tsy futures had started to reverse modest gains prior to the Fed Chair's testimony, support evaporating ahead of the potential risk event coupled with bounce in equities (weaker levels helped kick off bounce in Tsys in the first place).
  • Apparent disappointment over no real surprises from the testimony (some had hoped yield curve control would have been mentioned) spurred sharp duration sell-off to new session lows (10YY 1.3875%H; 30YY 2.2144%H).
  • Chop continues with levels bouncing off lows after consumer confidence (91.3 vs 90.0 exp) -- not "clear anything to do with Powell" one desk offered.
  • Heavy volumes tied to massive rolling of March to June, latter takes lead quarterly Friday (TYH/TYM>1.3M). Yield curves making new highs: 5s30s: 161.894 (Aug 2014 levels).

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