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Wells Fargo strategists suggest much of.....>

US TSYS
US TSYS: Wells Fargo strategists suggest much of the curve flattening tied to
the Federal Reserve's balance sheet reduction has already occurred they still
like flatteners in 2s10s (-3.137 Thursday to 53.245). "In our view, the December
2018 forward of 47bps is an easy target to beat." In the long end, Wells Fargo
prefers steepeners with 10s/30s around "38bps spot, while the December 2018
forward is 30bps. The key for the long end is whether (and how) the issuance
profile of Treasuries changes, potentially boosting the percentage of 30yr debt
or possibly adding 20yr bonds to the mix." In the intermediates, the "Fed's
balance sheet reductions per se should have little additional effect on Treasury
5s/10s," Wells added.

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