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Rates Near Lows

US TSYS SUMMARY

Quiet end to the week, Tsys weaker, near late session lows after the bell, yield curves mildly steeper on light overall volumes (TYZ<675k) after the bell.

  • After inching gradually higher during London hours, support evaporated abruptly after the NY open seeing two rounds of better selling by midday. Tsys traded sideways until coming under pressure again/extending session lows late. Likely some selling ahead of next week's $155B Tsy note auctions.
  • No strong trigger for moves, no substantive data (U-Mich consumer sentiment better than exp at 78.9), Fed speakers (Bullard, Bostic and Kashkari) and headline risk did little to move the needle. Headlines out of Europe appears to be showing rising risk of second wave of virus cases (France >13.3k, most since lockdown; UK PM Johnson said UK is seeing second wave, but is wary of committing to a second lockdown).
  • The 2-Yr yield is up 0.2bps at 0.1371%, 5-Yr is up 0.3bps at 0.2803%, 10-Yr is up 0.7bps at 0.6953%, and 30-Yr is up 1.2bps at 1.4506%.

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