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US TSYS: Weaker In Recent Trade, EGBs & Trump Tsy Sec Pick Eyd

US TSYS
USGlobalBulletMarketsFixed Income BulletsRegionNorth America

Extension lower in Tsys through early NY trade.

  • Two potential things at play here in our view:
  • U.S. participants reacting to Asia/London morning moves in wider rates markets, including latest round of weakness.
  • Fox’s Gasparino pointing to Kevin Warsh as the frontrunner to become Tsy Sec. While he is a monetary hawk, he is also a fiscal hawk, which should be supportive of Tsys on net (market may have traded off familiarity with his monetary stance to start).
  • We also note the potential removal of Warsh from the race to succeed Fed Chair Powell could be deemed dovish, as not many are more hawkish than him.
  • TY futures still comfortably off Friday’s low (108-30), last 109-05.
  • Tsy yields 2.5-5.5bp higher on the day, curve steeper. 10s ~1bp off the 4.50% area that generated buying interest ahead of the weekend.
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Extension lower in Tsys through early NY trade.

  • Two potential things at play here in our view:
  • U.S. participants reacting to Asia/London morning moves in wider rates markets, including latest round of weakness.
  • Fox’s Gasparino pointing to Kevin Warsh as the frontrunner to become Tsy Sec. While he is a monetary hawk, he is also a fiscal hawk, which should be supportive of Tsys on net (market may have traded off familiarity with his monetary stance to start).
  • We also note the potential removal of Warsh from the race to succeed Fed Chair Powell could be deemed dovish, as not many are more hawkish than him.
  • TY futures still comfortably off Friday’s low (108-30), last 109-05.
  • Tsy yields 2.5-5.5bp higher on the day, curve steeper. 10s ~1bp off the 4.50% area that generated buying interest ahead of the weekend.