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Risk-Negative Headlines Help T-Notes Edge Higher, Within Tight Range


T-Notes traded with a marginal bullish bias, holding a tight 0-05 range. Market closures in Japan, South Korea, Malaysia and Taiwan limited regional activity, while the U.S. will observe the Columbus Day.

  • The weekend brought some risk-negative headlines, but they failed to generate any substantial buying interest in T-Notes. North Korea resumed its missile tests involving a nuclear operation unit, an apparent attack damaged a heavily guarded bridge connecting mainland Russia to the Crimean Peninsula, while China's Caixin Services PMI unexpectedly dipped into contractionary territory.
  • Market pricing for the next FOMC meeting is little changed from today's opening levels with swaps implying a ~91% chance of another 75bp rate hike in November. The strong NFP report released last Friday reinforced expectations of continued aggressive tightening.
  • T-Notes last trade +0-01+ at 111-17. Eurodollar futures run -2.0 to +1.5 tick through the reds.
  • Fed Vice Chair Lael Brainard and Chicago Fed President Charles Evans will speak at the annual NABE conference today.

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