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Strong Bounce for November Rates, FOMC Countdown

US TSYS

November kicks off with strong rally in Tsys back to early Friday levels. Bonds outperforming ahead Wed's FOMC annc, 30YY slips to 4.0783% low, yield curves extend inversion (2s10s -3.478 at -47.557) on decent volumes: TYZ2>370k.

  • Fed forward guidance in focus as 75bp widely expected tomorrow, much debate over step-down to a 50bp hike in December as data cools. Little new in WSJ's Fed watcher Timiraos article overnight.
  • Tuesday data kicks off at 0945ET: S&P Global US Manufacturing PMI (49.9, 49.9), followed by ISMs, JOLTS and Construction spending at 1000ET:
    • ISM Manufacturing (50.9, 50.0)
    • ISM Prices Paid (51.7, 53.0)
    • ISM New Orders (47.1, --)
    • ISM Employment (48.7, --)
    • JOLTS Job Openings (10.053M, 9.625M)
    • Construction Spending MoM (-0.7%, -0.5%)
  • Tsy auction at 1130ET: $34B 52W bills

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