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Slightly Richer With Further Debt Talks, Fedspeak Eyed

US TSYS
  • Cash Tsys hold slightly richer after no clear progress in debt talks and the front end outperforming a touch after dovish Kashkari comments re looking towards skipping the June hike. Debt talk impasse continuation follows optimism building late last week before being dashed on Friday, and sees tense talks set for this week as cash balances start to look precarious. Biden and McCarthy are due to meet today, time unknown.
  • 2YY -2.1bp at 4.245%, 5YY -2.1bp at 3.711%, 10YY -1.1bp at 3.661%, 30YY -0.8bp at 3.919%
  • TYM3 trades 6+ ticks higher at 113-24+ but remains well within Friday’s range, with volumes at a low but recent average 235k. Resistance is seen at 114-05 (May 19 high) after which lies 114-27 (50-day EMA), whilst support sits at 113-08+ (Mar 15 low).
  • Fedspeak headlines an otherwise bare docket, with non-current year voters Bullard (0830ET), Bostic & Barkin (1105ET) and Daly (1105ET).
  • Bill issuance: US Tsy $57B 13W, $54B 26W Bill auctions (1130ET)

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