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Small Bear Steepening After Yday's Sell-Off

US TSYS
  • Cash Treasuries have seen a limited sell-off at the longer end as they catch up on yesterday's price action following Biden's Fed picks.
  • 2Y yield unchg at 0.630%, 10Y +1.7bps at 1.641% and 30Y +2.5bps at 1.987%, which sees the 2s/10s spread at 101bps and very close to flattest its been since January.
  • TYZ1 down -0-06+ on the day at 129-25+ and at both session and ytd lows.
  • The data focus today is on preliminary PMI for Nov (0945ET) before tomorrow's core PCE/incomes and durable goods for Oct.
  • Other events of note: Biden speaking on economy/inflation at 1400ET/1900GMT and Fed minutes on Wed.
  • Busy supply schedule today with $40B 35D bill (1130ET), $24B 2Y FRN (1130ET) and $59B 7Y (1300ET) auctions.
  • Next scheduled NY Fed purchases: TIPS 7.5Y-30Y, appr $1.075B (1030ET)

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