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Treasuries Consolidate Prior Rally As Assess Prospects Of Split Congress

US TSYS
  • Cash Tsys consolidate yesterday’s rally, with currently relatively little change from close whilst assessing a less dominant performance from the Republicans than expected with indications of a split Congress. Treasuries briefly touched highest levels since last week's FOMC meeting before reversing, whilst China’s Guangzhou locking down a third district on Covid fears has little lingering impact.
  • In yield space, 2YY +2.3bps at 4.674%, 5YY +1.8bps at 4.312%, 10YY +1.3bps at 4.136% and 30YY -0.5bps at 4.269%.
  • TYZ2 trades just 1+ ticks lower at 110-07+ with average volumes, off a session high of 110-15+ that moved closer to resistance at the 20-day EMA of 110-23+. The primary trend direction remains down with attention ultimately on the bear trigger of 108-26+ (Oct 21 low).
  • Fedspeak: Barkin (’24 voter) at 1100ET, Kashkari (’23) at 2000ET.
  • Data: Limited to weekly MBA mortgage rate/applications and wholesale sales/inventories before tomorrow’s CPI.
  • Bond issuance: US Tsy $35B 10Y note auction (91282CFV8) – 1300ET
  • Bill issuance: US Tsy $33B 17W bill auction – 1130ET

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