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Starting To Build On Yesterday's Sell-Off, 20Y Auction Later

US TSYS
  • Cash Tsys unwind an overnight move firmer to leave levels broadly consolidating yesterday’s sizeable sell-off, with the more recent move lower in the front-end in particular being supported by further support for ECB hikes in July.
  • 2YY +0.4bps at 2.705%, 5YY +0.4bps at 2.967%, 10YY -0.4bps at 2.982% and 30YY -0.2bps at 3.176%.
  • TYM2 sits 4+ ticks lower on the day at 118-23 on modestly below average volumes. Treasuries remain below the recent high of 120-00+ on May 12. The trend direction remains down and recent short-term gains are considered corrective -a pause in the downtrend. Any resumption of gains would open 120-18+, the Apr 27 high. Support eyed at 118-03+ (May 11 low).
  • Data/Fedspeak: MBA mortgage apps/contract rate and housing starts/building permits before Harker (’23 voter) at 1600ET.
  • Bond issuance: $17B 20Y auction (912810TH1) at 1300ET
  • Bill issuance: US Tsy $34B 52W Bill auction carried over from Tuesday at 1130ET

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