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Treasuries See Large Bear Flattening On FOMC Minutes

US TSYS
  • Cash Tsy yields are up 7+bps across the short-end and belly following the FOMC minutes flagging a chance of earlier and faster rate hikes, with runoff starting soon after deemed possible by some participants.
  • 2Y yields are +7.0bps at 0.830%, 5Y +7.5bps at 1.433%, 10Y +5.6bps at 1.704% and 30Y -+2.0bps at 2.085%.
  • TYH2 is down 0-14+ at 128-17 having reached a low of 128-25+. It has cleared 128-30+ (Nov 26 low) and opened the key support of 128-22+ (Nov 22 low).
  • Tomorrow: Weekly jobless claims (overshadowed by large ADP beat today and with payrolls on Fri) and then ISM services for Dec and durable goods for Nov at 1000ET. Price pressures are of particular interest for ISM after costs in today’s PMI reached a new series high.
  • NY Fed buy-op: TIPS 7.5Y-30Y, appr $925M (1120ET).
  • Issuance: $50B 4W, $40B 8W bill auctions.

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