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Path Of Least Resistance Remains Up

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Corrective Pullback

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Trend Signals Remain Bearish

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SocGen's Subadda Rajappa said the....>

US TSYS/SUPPLY
US TSYS/SUPPLY: SocGen's Subadda Rajappa said the Tsy's "sharp increases in
borrowing needs are likely to warrant more issuance across the curve, which
might eventually lead the Treasury toward re-introducing a 20y bond or an
ultra-long bond. Such an announcement is likely pre-mature for the November
meeting, but we will be looking closely for indications of such changes at the
upcoming refunding meeting."
- She added that "based on our estimates for an increase in the deficit from
$650bn in FY18 to $900bn and $1tn in FY18 and FY19 respectively, we adjust our
coupon issuance for the upcoming year. We expect increases of $2bn in the 2y
sector and $1bn in 10y and 30y, starting in November, with gross issuance of
$2.4tn and net issuance of $556 for calendar year (CY) 2018 (not including
roughly $200bn in SOMA add-ons for CY18). Any indication of increased long-end
issuance is likely to exert further pressure on long-end term premiums at least
over the short term."