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Treasuries Follow Gilts/EU FI Richer With Light Docket Ahead

  • Cash Tsys again follow EU FI and Gilts in particular this morning, rallying 4-7bps across the curve as new Chancellor Hunt steers policy down a more fiscally responsible path. A light docket likely sees a headline-driven session.
  • Major benchmarks rally 4-7bps across the curve, led by the 5-10Y but the front end also rallying as Fed hike expectations pull back off Friday’s new cycle highs following Thursday's CPI beat.
  • 2YY -4.4bps at 4.452%, 5YY -7.3bps at 4.195%, 10YY -6.8bps at 3.951%, and 30YY -4.8bps at 3.944%.
  • TYZ2 trades 14 ticks higher at 111-01+ on average volumes, firmly within Friday’s and Thursday’s even wider range, with a high of 111-28+ and low of 110-02 just above the psychological support of 110-00. The technical trend direction remains lower.
  • Data: Empire Manufacturing for Oct (-1.5 prev, -4.3 expected) – 0830ET
  • Bill issuance: US Tsy $57B 13W, $45B 26W bill auctions – 1130ET

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