UST MORNING CALL: 2Y Auction Performance May Indicate Fed Views
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- Muted price action overnight, USTs slightly higher, led by 3Y-7Y sector.
Alert: HALISTER1- Focus this week on the FOMC meeting, analyst views here
- Fed aiming to keep June rate hike on the table, resulting in flatter curve; use any flattening to add to 5s30s steepeners, Morgan Stanley analysts write in client note
- CFTC data shows specs adding steepener positions via FV (+$4.5b) vs WN (-$2.7b); 80k worth of short covering in EDs, though still next short $32.7b, writes Nomura in a client note
- Full set of CFTC results here
- Today’s 2Y supply outcome will be telling of how market is setting up for FOMC; a tail would signal credible expectations the market is shaping up for June hike, BMO says in client note
- Following BOJ, FOMC, attention may turn to month-end extension flows; Barclays U.S. aggregate est. at +0.07yrs, full list here
- USTs are closed in Tokyo on Friday, may mean month-end flows from Asia are done on Thursday
Source: BFW (Bloomberg First Word)
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UUID: 7947283