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JGB TECHS

(H2) Stabilising

USDCAD TECHS

Bias Still Points Lower

AUDUSD TECHS

Fading Onto Recent Gains

US

Tsy/Eurodollar Roundup

EURJPY TECHS

Remains Above Support

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Yield curves plumbed new depths, 5s30s 55.25 late (54.739L) last seen March 2020 as Fed speakers continued to back Fed Chair Powell's accelerated asset purchase taper message from Tue.
  • Taper est twice as fast as exp (early 2022 start/done by Mar) a precursor to rate hikes. How much and how quickly? Eurodollar Dec'24 futures (98.31) inverted 1-2bp vs. balance of Blue strip (EDZ4-EDU5) as mkt prices in rate CUTS by late 24 after as many as five 25bps hikes starting in 1Q22.
  • Session recap: Tsy mixed early, long-end pared gains after lower than exp wkly claims 222k (240k est). Early trade: prop and fast$ two-way in 2s and 5s, real$ buying 10s and 30s. Steepener unwinds while option desks eyed conditional bear curve flatteners. Short end weaker but off lows by midday amid real$ buying 2s and 3s, two-way in 10s and deal-tied rate locks in 2s-10s.
  • Bond yields gained after Atl Fed Bostic reiterated Chair Powell on pace of tapering: "IN FED'S INTEREST TO WRAP UP TAPER TOWARD END OF 1Q". Ahead of Fri's employ data, BOSTIC: EMPLOYMENT IS EVOLVING IN A WAY THAT IS QUITE POSITIVE" Bbg.
  • Late: Additional deal-tied selling after Daimler Trucks 8pt jumbo launched $6B in debt, late fast- and real$ selling in intermediates, domestic real$ bought 5s, bank portfolio selling 30s.
  • The 2-Yr yield is up 6.5bps at 0.6166%, 5-Yr is up 7.6bps at 1.2112%, 10-Yr is up 4.9bps at 1.4528%, and 30-Yr is up 3.4bps at 1.7731%.