US TSYS/RESEARCH: Jefferies analyst Spinello also projected
his Tsys mkt tech bias as neutral in the front end and “remain negative
and oversold in the back, with supply and distribution keeping a lot on
a sustained move, as we hear from the Fed Chairman tomorrow.” He
projected that today’s 10Y cash note yield range should be 3.755%/3.72%
(98 29/99-6) and 3.825% Bollinger Band extreme in day trade. He added
that “supply concessions through Thursday’s $32Bln 7yr note auction
should be viewed as a buying opportunity however chasing a rally in
front of supply should be view as the risk trade. Steeper yield curve
remains the favored trade and the recent consolidation has provided an
opportunity, with 5/30’s the preferred trade, to buy on any supply-
induced flattening.”
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