Tsys Lead Weakness In Core Global FI

7- to 10-Year Tsy yields move to fresh YtD highs, while 2s and 5s hit the highest level since early July and 20+-Year yields fail to challenge YtD highs.

• Cash Tsys are 3.5-7.5bp cheaper, with the belly leading the weakness. TYU3 trades just off recent session lows, which came ahead of the technical bear trigger (109-24).
• Some have pointed to the swelling $IG issuance slate as a driver for the move, although the cheapening did start before all the deals were tabled.
• Credit worry in China also remains evident, which brings up plenty of debate re: impact on Tsys.
• The move has allowed both Bund & gilt futures to register fresh session lows.
• The German cash curve has seen some light bear flattening, while the UK curve has seen slightly more pronounced bear flattening (a relatively soft round of short-dated APF sales from the BoE has provided no impediment to the weakness in the short end of the curve, although the move hasn’t extended since).