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Right Back Where We Were Pre-FOMC


A slow overnight session for Treasuries, with low volumes (<175k) for TYs which are trading within a tick of where they were prior to the FOMC announcement Wednesday.

  • The curve is basically unchanged too, having reversed the initial knee-jerk reaction to what was seen as a modestly hawkish Fed decision. (MNI's FOMC review will be out later today.)
  • The 2-Yr yield is up 0.2bps at 0.117%, 5-Yr is up 0.6bps at 0.3734%, 10-Yr is up 1bps at 0.9263%, and 30-Yr is up 0.9bps at 1.6642%. Mar 10-Yr futures (TY) down 1.5/32 at 137-27 (L: 137-25.5 / H: 137-30.5).
  • The rangebound movement in Tsys contrasts with equity futures and the USD, which are plumbing respectively new highs and lows in European trade.
  • We continue to await fiscal news which looks like the major factor to potentially move the needle. Talks on relief down to the 'final details' - expected to be unveiled as soon as today.
  • Today basically concludes the week's data too, and jobless claims and Nov housing starts - both at 0830ET - will be closely watched.
  • We also get Philly Fed at 0830ET, then later at 1100ET, KC Fed manufacturing.
  • In supply, $65bn in 4-/8-week bills sell at 1130ET, and two NY Fed purchase operations: 20-30Y Tsys for ~$1.750bn and later, 1-7.5Y TIPS, for ~$2.424bn.

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