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US TSYS: Early Gains Pared Ahead Of A Likely Messy Payrolls Report

US TSYS
  • Treasuries have reversed earlier gains to leave them modestly lower across the curve, with the intraday pressure coming from both EGBs and Gilts alike rather than more idiosyncratic UK flows of the past two days.
  • Cash yields are 0.5-2bp higher on the day, with increases led by 3s.
  • 10Y yields at 4.297% hover within touch of recent highs of 4.3365% (Oct 29) at what were highs since early July and could very easily challenge this on a stronger than expected payrolls report.
  • 2s10s at 11.4bps (-0.2bps) is within recent ranges.
  • TYZ4 trades close to the day’s lows of 110-09+ (-05+) having remained within yesterday’s range throughout, on softer than recent average volumes of 295k.
  • The bear cycle is still in play with support at 110-04+ (Oct 31 low) after which lies the round 110-00.
  • Data: Payrolls report Oct (0830ET), S&P Global US mfg PMI Oct final (0945ET), Construction spending Sep (1000ET), ISM mfg Oct (1000ET)
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  • Treasuries have reversed earlier gains to leave them modestly lower across the curve, with the intraday pressure coming from both EGBs and Gilts alike rather than more idiosyncratic UK flows of the past two days.
  • Cash yields are 0.5-2bp higher on the day, with increases led by 3s.
  • 10Y yields at 4.297% hover within touch of recent highs of 4.3365% (Oct 29) at what were highs since early July and could very easily challenge this on a stronger than expected payrolls report.
  • 2s10s at 11.4bps (-0.2bps) is within recent ranges.
  • TYZ4 trades close to the day’s lows of 110-09+ (-05+) having remained within yesterday’s range throughout, on softer than recent average volumes of 295k.
  • The bear cycle is still in play with support at 110-04+ (Oct 31 low) after which lies the round 110-00.
  • Data: Payrolls report Oct (0830ET), S&P Global US mfg PMI Oct final (0945ET), Construction spending Sep (1000ET), ISM mfg Oct (1000ET)