Small Rally In Tsys After Bear Steepening Of Past Two Days

Small but growing rally in Tsys today after bear steepening of past two days, with yields down -1.5 to -3bps across 2Y-10Y tenors and -1bps further out the curve.

• Long-end to be tested again with 20Y auction in just over an hour (1300ET) after last week's weak 30Y auction.

• There was little market reaction to housing starts/permits earlier. Tomorrow's data focus likely Philly and Kansas Fed mfg indices for Nov after last week's strong Empire.

• Biden Fed chair announcement expected in "the next four days", although a BBG source later suggested it may slip into next week. 2-horse race between Powell & Brainard (in line with broader expectations), further eroding Powell's early frontrunner status.

• Upcoming Fed speakers: Daly & Waller (1240ET), Evans (1605ET) and Bostic (1610ET) to come today. Tomorrow: Bostic (0800ET), Williams* (0930ET), Evans (1400ET) and Daly (1530ET). [* likely pick]
• TYZ1 up to 130-13 towards top of yesterday's range having briefly nudged to a low of 130-01+ in early trading (lowest since 22 Oct).

• 2-Yr yield down -1.4bps at 0.502%, 5-Yr down -2.8bps at 1.236%, 10-Yr down -1.9bps at 1.615%, and 30-Yr is down -1.4bps at 2.015%.