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Unusually Wide Pre-US Session Ranges After Weekend Developments

US TSYS
  • Cash Tsys have seen sizeable two-way trade with an unusually large range before the US session gets underway (2YY intraday range 3.63%-4.02%).
  • What started as a positive market reaction (with downward pressure on fixed income) to weekend developments with the UBS takeover of CS and coordinated central bank action for USD liquidity swap lines, has been replaced with concerns for AT1 bonds with spillover across asset classes.
  • Treasuries currently sit firmly off highs having retraced some of the bid, but maintain richer levels from Friday’s close, led by the belly.
  • In yield space, 2YY -2.4bps at 3.813%, 5YY -5.0bps at 3.450%, 10YY -3.9bps at 3.389% and 30YY -0.9bps at 3.610%.
  • TYM3 trades 1 tick lower at 115-25 on heavy volumes of 725k. It’s off highs of 116-24 that opens key resistance at 116-28+ (Jan 19 high) having cleared 116-01 (Mar 16 high) and 116-08 (Feb 2 high).
  • No data
  • Bill issuance: US Tsy $57B 13W, $48B 26W bill auctions (1130ET)

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