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The strong possibility that the.....>

US TSYS SUMMARY
US TSYS SUMMARY: The strong possibility that the debt ceiling can will be kicked
down the road until mid-Dec has flattened out the bump in bill yields in
October. Those bill rates declined by around 15bp but still reflect some
uncertainty. Additionally, there is an embryonic bill curve bump in December.
- Treasury yields are slightly lower today, having recovered from the debt
ceiling related slide from late yesterday. The 10Y was last at 2.087%, a drop of
approximately 1.7bp. The shift lower in yield has been extremely parallel.
- In the aftermath of the debt-ceiling news, sources spoke of strong hedge fund
selling. 
- The front end Tsy outperformance of the swap curve has not reversed and the 2Y
swap spread is at 23.8bp this morning, which about 0.75bp wider than the US
close and doubles the reaction of swap spreads to the debt ceiling agreement.
- Technically, the Bollinger base is at 2.068% and studies look modestly
oversold (yield, not price) and are a concerns for yield bears.
- Treasuries await the ECB as much as EGBs.

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