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Twist Steepening As 2s10s Pull Back From Inversion
- Cash Tsys have twist steepened this morning as the curve pulls back from recent flats and the brief inversion for 2s10s yesterday for the first time since Sep-2019, now back up at 9bps.
- The move appears led by a trimming of rate hike expectations (but still north of 200bps priced over the next six meeting) which has helped see the front-end rally off recent lows and longer end more than unwind an earlier rally.
- 2YY -4bps at 2.324%, 5YY -1.7bps 2.482%, 10YY +1.3bps at 2.407%, 30YY +2.9bps at 2.530%.
- TYM2 sits only 2 ticks lower at 122-08+ after a round trip to 122-26+ overnight, which now forms new resistance, clearance of which could open 123-12 (Mar 23 high). Modestly above average volumes.
- Fedspeak: Barkin, 2024 voter (0830ET) and George, 2022 (1300ET).
- Data: The pick today is ADP employment for Mar (0815ET) plus the third release for quarterly GDP/PCE (0830ET).
- Bill issuance: US Tsy $30B 119D bill auction (1130ET).
- No bond issuance today after 2Y (tailed), 5Y (traded through) and 7Y (tailed) sales so far this week.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.