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/STIR: 2s10s Tests YtD Steeps Following ADP

US TSYS

Softer-than-expected ADP data, coupled with a negative revision, sees TY futures hit a fresh session high of 114-27.

  • Next resistance comes in at a Fibonacci retracement of the Aug 5-8 pullback (114-31+)
  • Yields 1.5-4.0bp lower across the curve, bull steepening a little on the back of the data as we see a modest dovish repricing in Fed Funds futures.
  • 2s10s disinverts again, testing year-to-date steeps.
  • Fed Funds show 37bp of cuts for this month’s FOMC vs. ~36bp ahead of the reading. Further out, 111bp of cuts are priced through year-end vs. ~109bp heading in.
  • Jobless claims due imminently.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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