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Still Can't Get No Relief


Headline risk trumped data and Fed speakers Wednesday. Tsys traded weaker after the bell but were well off session lows to near middle of session range, long end underperforming.

  • Tsys were trading firmer on the open but reversed reportedly over hopes of a economic relief bill as Tsy Sec Mnuchin and House Speaker Pelosi were expected to meet afternoon to discuss. MNI cautioned a no deal on bill was sure to reverse the risk-on tone sharply, month/quarter-end imbalances to add to real-vol.
  • And so it was: heavy volumes driven by late month/quarter end rebalancing and risk-on unwinds largely tied to disappointment over failed stimulus relief negotiations as well as headline from pharmaceutical company Moderna that they will not have a Covid-19 vaccine ready prior to the election on Nov 3.
  • Late session volume surge, TYZ>1.565M after the bell, appr 700k tied to move off lows on stimulus headlines and second surge on Moderna headlines.
  • The 2-Yr yield is up 0.4bps at 0.127%, 5-Yr is up 2.1bps at 0.2752%, 10-Yr is up 3.5bps at 0.684%, and 30-Yr is up 5.1bps at 1.4663%.

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