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Several regional factors during Asia........>

US TSYS
US TSYS: Several regional factors during Asia hours allowed Tsys to reverse
their early, albeit moderate, weakness, which was likely a result of regional
participants reacting to the latest FOMC decision. T-Notes last +0-00+ at
129-13, with yields 0.8-1.7bp lower across the curve & modest bull flattening
evident. Not much in the way of a standout flow, but a 2.0K buyer of TYZ9 helped
the contract to best levels in recent trade.
- As a reminder, the Fed delivered a 25bp cut to the Fed Funds tgt range, with a
30bp cut to the IOER in the wake of the latest $ funding stresses. There were 2
hawkish dissents, with Rosengren & George holding that particular torch for a
2nd straight meeting, while Bullard voted for 50bp cut. Only 7 dots in the
updated dot plot look for 1 further cut in '19. Chair Powell went to great pains
to disassociate this week's funding issues with real econ impact/MonPol.
Importantly, he kept repeating data-dependence, which was probably inevitable
given the split in the FOMC & the steady flow of decent data. But for a rates
mkt that went in pricing more than a mid-cycle adj., that was a disappointment.
- The NY Fed will conduct overnight repo ops again on Thursday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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