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Tentative Rally After Yesterday's Sell-Off

US TSYS
  • Cash Tsys have seen a limited rally after yesterday’s bear steepening was extended by the weak 7 auction.
  • This sees the short-end back near yesterday lows (but still close to ytd highs) whilst the longer-end remains towards the top end of yesterday’s range.
  • 2Y yields are -1.2bps at 0.734%, 5Y -2.1bps at 1.276%, 10Y -2.1bps at 1.529% and 30Y -1.7bps at 1.944%.
  • TYH2 has drifted higher this morning +0-04+ to 130-11+ from yesterday’s late low of 130-03, on still modest but at least higher volumes than earlier in the week. 130-03 forms a new initial support level before a firmer 129-31 (Dec 8 low). Initial resistance is 130-23+ (Dec 29 high).
  • Last US data of the year with weekly jobless claims before the MNI Chicago PMI for Dec (62.0 expected after 61.8) at 0945ET.
  • Bill issuance: US Tsy $50B 4W and $40B 8Y bill auctions (1130ET).

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