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Quiet Morning After Yesterday's Bull Flattening

US TSYS
  • TYZ1 currently at low end of today's narrow range (130-15+) on low volumes, consolidating yesterday's 11 tick rally.
  • Slight bear steepening in cash Tsys with 2Y unchg at 0.498%, 10Y up +1bps at 1.599% and 30Y up +1.4bps at 1.990%, after 30Y in particular rallied 4bps yesterday.
  • Fedspeak from Bostic (0800ET), Williams (0930ET), Evans (1400ET) and Daly (1530ET). Evans, normally on dovish end of the spectrum, said yesterday that inflation strength has persisted longer than he expected.
  • Data on light side with jobless claims and Philly Fed for Nov, potential upside in latter as seen unchg despite strength in Monday's Empire survey.
  • 10Y TIPS auction 1300ET and end of month supply announcement from the Treasury.
  • Next scheduled NY Fed purchase today 1010-1030ET for Tsy 22.5-30Y (appr. $1.600B).
  • Markets also digest a busier corporate pipeline, with over $53B in deals set to launch this week (as of Tue close but with only three names seen so far and likely to pick up today). Highlights include $6.7B from Canadian Pacific Railway as well as $4B from Barclays.

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