Overnight, Dollar/Yen broke through the psychologically important 100 level further pressuring Treasuries whichsold-off all the way to 2.95%. In the U.S., the market is opening lower led by 5-Year notes (2s5s 3.1 bps steeper while 5s10s is 1.4 bps flatter). Another signal things are not looking great forTreasuries is the proverbial canary in the coal mine (2-Year notes) have blown through strong resistance of 0.45%. Despite the sharp sell-off, there are still numerous potential catalysts for a rally in Treasuries. The potential strike(s) on Syria, German Elections, Fed Tapering, and/or further weakening in EM countries.
At 11:00 AM EST there is a USTbuyback in the 11/20-8/23 sector.
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