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Twist Flattening With China Covid Rules & EA PMI Beat, Heavy Docket Ahead

US TSYS
  • Cash Tsys have seen a limited twist flattening after the late open with the Tokyo holiday, with the pivot out in the very long end. Moves are relatively subdued ahead of a solid docket with Thanksgiving tomorrow.
  • Various factors at play, including the RBNZ with a hawkish 75bp hike, a beat for the Eurozone PMI (which included a beat for Germany but miss for France) ahead of the US equivalent later and China tightening Covid rules in Beijing and Shanghai. Chinese state television reporting the need to cut banks’ RRR and use other mon pol tools has seen little impact on the space.
  • 2YY +2.3bps at 4.537%, 5YY +1.4bps at 3.958%, 10YY +0.7bps at 3.763%, and 30YY -0.9bps at 3.816%.
  • TYZ2 trades 2+ ticks lower at 112-16+ on below average volumes. There is a technical bullish outlook with resistance at 113-11 (Nov 16 high) and support at 111-25 (20-day EMA).
  • FOMC minutes at 1400ET.
  • Data: Durable goods (0830ET), S&P Global PMI (0945ET), U.Mich Nov final (1000ET), plus weekly MBA mortgage apps (0700ET) and jobless claims pulled forward to a Wednesday (0830ET).
  • Bill issuance: US Tsy $55B 4W, $50B 8W bill auctions (1000ET), US Tsy $33B 17W bill auction (1130ET)

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