UST MORNING CALL: Slight Bear Flattening Ahead of Auctions
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- USTs under mild pressure as U.S. trading resumes after long holiday weekend, with U.K. observing bank holiday; 2Y/5Y/7Y auction cycle begins today and month-end rebalancing may drive flows.
Alert: HALISTER1- 10Y yield, higher by ~1bp at 2.55%, has plied a 5bp range over past 5 days, tightest over a 5-day period since Nov. 2015
- UST 5s30s flatter by ~1bp, oscillating around 108bp in narrow trading range; long-end may benefit from month-end index extension and portfolio rebalancing favoring bonds
- Wells Fargo estimates $32b outflow from equities vs. $20b inflow to bond; Credit Suisse estimate $38b equities outflows vs. $22b bond purchases
- Bloomberg Barclays Treasury extension est. +0.08y
- U.S. economic calendar includes Oct. S&P Home Price Index at 9am ET, Dec. Consumer Confidence and Richmond Fed Manufacturing Index at 10am; later this week, Dec. Chicago PMI Dec. 30
Source: BFW (Bloomberg First Word)
To de-activate this alert, click here
UUID: 7947283