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Broader base selling going through

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DMO consultation outcome (part 3/3)

US TSYS
US TSYS: T-Notes ticked have ticked higher, back to unchanged levels last, with
some attributing the modest risk off flows to a BBG report of China dispelling a
U.S. vessel near the South China Sea, however, our sources highlighted JPY
hedging out of Tokyo as a factor weighing on the JPY crosses, which may have
spilt over into the space.
- That being said, a soft regional equity backdrop & pressure on U.S. index
futures will have provided additional support to Tsys.
- On the Fedspeak front Federal Reserve Bank of Boston President Eric Rosengren
on Monday repeated his call for the central bank to raise interest rates
gradually to a "mildly restrictive stance" over the next few years despite
recognising "clear signs of rising risk" from abroad. While Minneapolis Fed
President Neel Kashkari said that the Federal Reserve might be "overdoing it"
with its interest rate increases as the economy has yet to reach full
employment.
- The Eurodollar strip trades unchanged to a tick lower on low volume.
- T-Notes last 118.21+, U.S. 10-Year cash Tsy yields last 3.078%.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com