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Well Off Cycle Lows

US TSYS
Tsys remain well bid, rally taking breather near session highs (USM3 124-18, +1-16 vs. 124-22 high) puts Bonds back to early Wednesday levels (pre-ISM prices paid driven sell-off).
  • Yield curves paring portion of Thu's bear steepening, 2s10s -3.366 at -86.930 currently with short end more anchored after 2YY tapped 4.9014% yesterday, highest since May 2007.
  • STIR: Running near steady: Fed funds implied hike for Mar'23 at 30.1bp (-.7), May'23 cumulative 57.8bp (+.4) to 5.154%, Jun'23 75.2bp (+.3) to 5.328%, terminal at 5.440% in Oct'23 vs. early Thursday's 5.51% cycle high.

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