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Short End Weaker on Potential 50Bp ECB Hike Thu; Stocks Well Bid

US TSYS
Rates weaker after the bell, inside range w/ Bonds back near middle of range -- curves flatter w/ the short end near lows, pressured after Reuters, then Bloomberg cited ECB sources pointing to potential 50bp hike at Thu's meeting vs the long-expected 25bp.
  • Yield curves flatter, 2s10s -2.041 at -21.556 vs. -15.344 high. Overall volumes remain light by the close, TYU2 915k after the bell. Pick-up in swappable debt issuance from domestic/foreign banks generated decent two-way hedging in short end to intermediates w/ surprise $10B BoA jumbo 3pt issuance leading total $18.55B issuance on the day, $39.3B/wk.
  • Earlier risk-on tone coincided with headlines Russia's Nord Stream 1 pipeline to restart flow at reduced levels sometime Thu. Closed due to maintenance - the reopening underscored the morning risk-on tone, Tsys and EGBs lower.
  • Equities extended gains following positive earnings annc's from: Signature Bank NY (SBNY) $5.26 vs. $5.057, Truist (TFC) $1.20 vs. $1.146, JNJ $2.59 vs. $2.553, Hasbro (HAS) $1.15 vs. $0.935, Halliburton (HAL) $0.49 vs. $0.449. Huge beat for Lockheed Martin (LMT) $6.32 vs. $3.974 est.
  • Cross-asset, crude firmer (WTI +1.37 at 103.97 (vs. 99.97 low), Gold firmer but off highs +2.53 at 1711.75.
  • In focus Wednesday: Existing Home Sales (5.41M prior, 5.40M est); MoM (-3.45%, -0.2%) at 0830ET. US Tsy $14B 20Y Bond auction re-open (912810TH1) at 1300ET.

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