HALISTER1: UST MORNING CALL: 7Y Sale, Month-End; RBS Sees Post-Fed Inflows

UST MORNING CALL: 7Y Sale, Month-End; RBS Sees Post-Fed Inflows

(Bloomberg) -- USTs extend gains in Asia hours after BOJ keeps policy unchanged, before staying in tight range through London hours.
  • Focus on GDP data, 7Y supply, ahead of month-end flows
  • 7Y auction should find support for recent rise in yields, though will need continued high levels of end-user participation to underwrite smoothly, JPMorgan says in note
  • Month-end duration extension flows may begin to impact the market; Barclays U.S. Aggregate is +0.07 yrs
    • With Japan shut tomorrow and most of next week, some overnight buying may have been driven by month-end demand, CRT strategist David Ader writes in client note
  • Maintain bullish stance on USTs, preferring belly intermediates; market is oversold, showing some signs of being short, expect post-Fed inflows, RBS says in client note
  • Technicals
    • Support: 129-22+ (April 25 high), 129-15+ (April 26 high)
    • Resistance: 130-06+/10 (April 19 low, 21-DMA), 130-19 (April 20 high)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
David Ader (CRT Capital Group LLC)

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