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Tantrum Tests Lower For Longer

US TSYS
The week's sell-off in rates as well as equities, accelerated sharply Thursday, catching may off guard. Societe Generale strategists take on the the spike in 5Y Tsy yields (0.6113 low to 0.8617 high after the poorly received $62B 7Y note auction tailed 4bp) "seems to be challenging the Fed's 'lower for longer' mantra."
  • While a momentum-led tantrum like this one could have more room to run over the near term, the sell-off, especially the cheapening of the belly, seems unsustainable to us.

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