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Yld Surge, 2YY Tops 4.2% Overnight

US TSYS
Tsys trading weaker again, but off recent overnight lows when 2YY climbed to new 15Y high of 4.2162% (from around 3.91% at the start of the week). Heavy volumes (TYZ2>450k already).
  • Markets continue to digest hawkish forward guidance since the Fed hiked 75bp on Wed, the BoE 50bp yesterday. Yield curves little flatter, unwinding small portion of yesterday's bear steepening, 2s10s currently -2.913 at -43.967 (-41.164 high Thu vs. -57.943 low).
  • Data focus turns to US PMIs after European PMIs (UK Flash Mfg PMI48.5 better than 47.5 est but still contractionary, services 49.2 vs. 50.0 est; EU Mfg PMI 48.5 vs. 48.8 est;) saw EGBs trade lower on rising prices. US data at 0945ET:
    • S&P Global US Manufacturing PMI (51.5, 51.0)
    • S&P Global US Services PMI (43.7, 45.5)
    • S&P Global US Composite PMI (44.6, 46.1)
    • Fed speak returns after 10 day Blackout:
  • Fed Chairman Powell at Fed Listens event at 1400ET, opening remarks unlikely to move markets, but may make iterative remarks tied to Wed's presser.
  • Current cross asset snapshot: stocks weaker (SPX -38.0 at 3734.0) crude weaker (WTI -1.92 at 81.57), Gold weaker (-15.05 at 1656.17).

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