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JGB TECHS

(M1) Bullish Focus

AUSSIE 10-YEAR TECHS

(M1) New Multi-Month Highs

AUSSIE 3-YEAR TECHS

(M1) Directional Triggers Intact

USDCAD TECHS

Approaching Major Support

US TSYS SUMMARY

Inflation Concerns Underpin Bear Steepening

US TSY/RECAP
US TSY/RECAP: Thurs provided another volatile day for the space, with T-Notes
going out near their post-MNI ECB Sources/Twist story highs, after early dealing
saw heavy carry-over selling as Tsy yields climbed to multi-year highs on the
back of strong U.S. data & hawkish rhetoric from Fed Chair Powell Weds,
accelerating as 10-Year yields breached 3.2% during Asia-Pac hours Thurs.
- Tsy futures bounced sharply on the back of an MNI Sources story which
intimated that the ECB is said to be pondering "a possible Twist-like
reinvestment of its maturing debt portfolios next year," spurring Bund buying,
with Tsys close behind, allowing the curve to finish a touch steeper on the day.
- US equities cratered, adding to the mid-morning bounce in rates, as weak EM
shares alongside Chinese corporate espionage reports weighed.
- Ongoing flattener unwinds were seen, with huge Tsy & Eurodollar option flow
apparent from Asia-Pac trade through U.S. hours, and some profit taking on long
put positions noted. Implieds steady/mildly weaker ahead of Friday's NFP report.
- Focus Friday falls on NFPs, as well as addresses from Fed's Kaplan & Bostic.
- T-Notes last 117.28+, U.S. 10-Year cash Tsy yields closed at 3.187%.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com