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T-Notes Look Past Risk-Negative Headlines, Cash Trading Closed


T-Notes have respected the confines of a tight, 0-03 range thus far. Market closures across Japan, South Korea, Taiwan and Malaysia limit headline flow in Asia, although mainland China returns after a week-long holiday. Cash trading in U.S. Tsys will be shut due to the U.S. observing the Columbus Day.

  • The weekend brought some generally risk-negative headlines, but they have failed to generate buying interest in T-Notes. North Korea resumed its missile tests and held a drill involving its nuclear operations unit, unknown saboteurs blew up a heavily guarded bridge connecting mainland Russia to the Crimean peninsula, while China's Caixin Services PMI unexpectedly dipped into contractionary territory.
  • Market pricing for the next FOMC meeting is little changed from today's opening levels, with swaps implying a 92% chance of another 75bp rate hike in November. The strong NFP report released last Friday reinforced expectations of continued aggressive tightening.
  • TYZ2 last deals +0-01+ at 111-16+, testing session highs. Eurodollar futures last seen -1.0 to +1.0 tick through the reds.

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