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Twist Flatter Ahead Of A Data Deluge Including ISM Services

US TSYS
  • Treasuries have seen a reasonable twist flattening, as the front-end reverses yesterday’s rally despite lower oil prices (perhaps better reflecting the stronger JOLTS openings, plus arguably sizeable bill issuance today) but the longer end follows most EGBs slightly richer on French political developments.
  • Today sees a particularly heavy data docket ahead of Independence Day closures.
  • Cash yields sit between 2bp higher (2s) and 1.5bp lower (30s), with 2s10s at -33bps (-2.3bps). The latter is off yesterday’s high of -27.4bps which marked the highest since early May having swung strongly from a YTD low of -50.8bps in late June.
  • TYU4 is unchanged at 109-15, within yesterday’s range, on somewhat more typical volumes of 270k after heavy overnight sessions in recent days.
  • The bear threat remains within support at 109-02+ (Jul 1 low) stopping just short of a key support at 109-00+ (Jun 10 low).
  • Data: Weekly MBA mortgages (0700ET), Challenger Job cuts Jun (0730ET), ADP employment Jun (0815ET), Weekly jobless claims (0830ET), Trade balance (0830ET), S&P Global US Services/Composite PMI Jun final (0945ET), ISM services Jun (1000ET), Factory orders May (1000ET)
  • Fedspeak: Williams in r* panel in Sintra (1200ET, text + Q&A), FOMC Minutes (1400ET)
  • Bills issuance: US Tsy $85B 4W, $80B 8W (1000ET), US Tsy $60B 17W (1130ET)

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