Overnight Flows

May 29th, 2014 6:56 am | by John Jansen |

Via CRT:

OVERNIGHT FLOWS:  The market is bid, again, with 7s of all things the best performer as the strength edges down the curve.  The US continues to improve against Bunds with the spread of 109 bp the narrowest in a few weeks and, perhaps we think, heavily influenced by the month-end extension differentials though the generic yield spread itself and overseas bid for Treasuries is the forest that should not be masked by the tree of month end.  Volumes were modest with TY at 94% of the norm and cash just 82%.  7s were active with a high 13% of market share while 5s were the volume leader with 33% and bonds, again, doing well with a greater-than-average 6%.

It is little surprise then that there were extensions from 5s into longer end of belly out of Asia, both investors and centrals, and some catch up by folks left behind which means duration buying.  A bit of two-way action was noted out the curve as well as some profit taking.

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