Sizeable bear steepening in Tsys breaks recent trend

Sizeable bear steepening in Tsys breaks the recent trend.

• The long-end has steepened notably, with 30Y yields up 7bps to exceed the 50DMA and 2s/10s widening 4.6bps to 110bps (highest since 5 Nov). Initial move on strong NY Empire survey before further momentum amid corporate issuance.
• This steepening is an abrupt change from last week when 2s/10s started and finished at the same level in a week disrupted by Veterans Day and goes against the flattening trend since mid-October.
• Latest levels: 2-Yr yield is flat at 0.512%, 5-Yr is up 2.3bps at 1.244%, 10-Yr is up 4.8bps at 1.609%, and 30-Yr is up 6.7bps at 1.994%.
• Heavy data schedule tomorrow, with the pick being retail sales for October at 0830ET. Also get Import/Export prices, Industrial Production/Cap-U, Business Inventories and Net TIC Flows.
• An array of Fed speakers this week. Barkin & Bostic (2021 voters) and George (2022) speak tomorrow at 1200ET but the likely key speaker is Vice Chair Clarida on Friday at 1215ET on Global Mon Pol Coordination.
• Other events of focus are the Biden-Xi virtual summit and the signing of the Infrastructure bill tonight before the Build Back Better plan potentially going to the House later this week.
• NY Fed operational purchases tomorrow for Tsy 4.5Y-7Y (appr $5.275B) at 1010-1030ET and Tsy 10Y-22.5Y (appr $1.425B) at 1100-1120ET.