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US OUTLOOK/OPINION

GS: Payrolls Doesn't Change Faster Taper & First Hike In June Call

USDCAD TECHS

Bull Theme Remains Intact

US TSYS

Strong Stocks, Rebound for Oil Weighs on Tsys

EURJPY TECHS

Trend Signals Still Point South

AUDUSD TECHS

Stabilises Off Lows

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  • STIR markets have taken a bit of a breather today with the biggest move across the Eurodollar / short sterling / Euribor strips being 3 ticks on the day so far. Gilts and Bunds have reversed some early weakness to trade almost flat on the day with little movement in curves. Treasuries, meanwhile, have seen a flattening of the curve with 2-year yields 0.8bp higher but 10-year yields 1.8bp lower on the day.
  • There has been no market-moving data in the European morning session with focus instead on supply with a green 30-year gilt being launched via syndication for GBP6bln, while Spain has sold E5.1bln of Bonos/Oblis, France sold E7.5bln of MT OATs and a French linker auction still to close. The US will hold a 5-year TIPS auction later, too.
  • There were some interesting comments from Banca d'Italia's Visco who suggested that a common EU sink fund should be created to buy excess debt issued by EU national governments due to the pandemic in order to help put national debt sustainability on a better track. It's unlikely we would see anything on this scale retrospectively, however.
  • Looking ahead we have US claims and existing home sales as well as an appearance from Fed's Waller.
  • TY1 futures are down -0-3+ today at 130-17 with 10y UST yields down -1.8bp at 1.640% and 2y yields up 0.8bp at 0.395%.
  • Bund futures are down -0.02 today at 168.69 with 10y Bund yields up 0.4bp at -0.123% and Schatz yields up 0.4bp at -0.682%.
  • Gilt futures are up 0.08 today at 124.17 with 10y yields down -0.4bp at 1.142% and 2y yields down -0.5bp at 0.669%.