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Slight Steepening Ahead Of Powell, ISM

US TSYS SUMMARY

Treasuries have steadied out after turning lower in the European morning, and ahead of Fed speakers including Chair Powell and ISM data.

  • Curve has steepened (5s30s testing Friday's highs), reversing a bit of overnight flattening: the 2-Yr yield is down 0.2bps at 0.1466%, 5-Yr is up 0.8bps at 0.3687%, 10-Yr is up 1.8bps at 0.8569%, and 30-Yr is up 2.4bps at 1.5914%.
  • Mar 10-Yr futures (TY) down 2.5/32 at 138-3 (L: 138-00.5 / H: 138-07.5)
  • Dollar weaker (by ~0.4% vs EUR and GBP) and equities gaining following end-Nov profit taking (eminis on the cusp of all-time highs).
  • Fed's Powell appears before the Senate Banking Committee (alongside Tsy Sec Mnuchin) at 1000ET, with the obvious point of interest being the non-extension of various Tsy/Fed lending facilities beyond end-year.
  • Gov Brainard speaks at 1200ET, SF's Daly at 1315ET, and Chicago's Evans at 1500ET.
  • Final Nov PMI at 0945ET ahead of ISM Manufacturing and Oct Construction spending at 1000ET.
  • Another slate of bill auctions today, with $60B in 42-/112-days at 1130ET, and $34B in 52--wk at 1300ET. NY Fed (which released its updated forward schedule yesterday) buys ~6.025B of 4.5-7Y Tsys.

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