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Tight Re-Open For Futures After Tuesday's Rally

US TSYS

A narrow re-open for T-Notes, with the contract operating around late NY highs, last +0-03 at 132-12+

  • Tuesday saw the space firm, with bull flattening in play as 30s richened by a little over 8.0bp come the bell. This came after a sizeable FV/TY bull flattener block trade in pre-NY dealing. Block buys in FV & TY futures during NY hours also aided upward momentum.
  • Mid-month supply got off to a solid start, with the latest 3-Year auction stopping through WI by 0.4bp, while we saw an uptick in (and above recent average) cover ratio, as dealer participation remained below the recent average (although did nudge higher vs. prev. auction).
  • Swap spreads narrowed given continued uncertainty surround Tsy SLR relief matters.
  • Chinese inflation data shouldn't move the Tsy market, which will leave participants watching the broader ebb and flow/headlines during Asia-Pac hours, with 10-Year Tsy supply and U.S. CPI data headlining locally on Wednesday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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