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Treasuries Eye ISM & JOLTS After Large Bear Steepening

US TSYS
  • Cash Tsys have been relatively subdued after yesterday’s large bear steepening, with the limited moves seemingly pinned by news of the latest localised lockdown in China, ahead of important data releases.
  • 2Y yields are +1.2bps at 0.780%, 5Y +1.5bps at 1.369%, 10Y +1.1bps at 1.639% and 30Y -0.2bps at 2.021%.
  • TYH2 has edged lower to 129-12+, after falling -1-00+ yesterday. It is testing a support level of 129-12+ (76.4% retracement of the Nov 24 – Dec 20 rally), a break of which could open the 128s (late Nov lows).
  • Two significant releases ahead with ISM for Dec and JOLTS for Nov both at 1000ET/ 1500GMT.
  • The JOLTS quits rate will likely be looked at particularly closely after Powell noted in the Dec FOMC presser that it “is really one of the very best indicators […] So on wages, that’s the price indicator we look at”.
  • NY Fed buy-op: TIPS 1Y-7.5Y, appr $1.525B (1120ET)

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