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Steadying Out After FOMC Rout

US TSYS SUMMARY

Tsys have stabilized in overnight trade Thursday following the hawkish FOMC-led sell-off Wednesday.

  • The 2-Yr yield is down 0.6bps at 0.1993%, 5-Yr is down 0.8bps at 0.8874%, 10-Yr is down 1.4bps at 1.5617%, and 30-Yr is down 3.1bps at 2.1766%.
  • Sep 10-Yr futures (TY) down 1.5/32 at 131-22.5 (L: 131-14 / H: 131-24.5). High volumes (570k+).
  • Like TYs, equities remain weaker but off overnight lows; dollar stronger.
  • Sell-side analysts' reviews of Wednesday's FOMC meeting are nearly unanimous in declaring the outcome more hawkish than expected, with a fair few expectations for taper/tightening timelines brought forward. Our full review will be out shortly.
  • Jobless claims data (0830ET) is the highlight of the calendar, alongside Philly Fed at the same time.
  • In supply, 4-/8-week bill auctions ($80B) at 1130ET; $16B TIPS auction at 1300ET.
  • NY Fed buys ~$2.025B of 22.5-30Y Tsys.

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