T-notes were confined to a tight range today, with fiscal cliff talks showing little progress and after USD 99bln of 2s, 5s and 7s supply earlier in the week. The 5y TIPS auction was better received than the nominal treasury issuance on Monday to Wednesday, with the yield stopping through the WI by 2bps, causing instant strength in the 5yr TIPs, and 5s BEs seeing upside as the 5y note under performed its peer. The curve is seen flatter today and the 10y yield holding below 1.8%, in a continuation from yesterday and with the long-end outperforming following the short-end supply. Volumes remain notably very light heading into the Christmas close next week, investors remain reluctant to position ahead of the House vote on Boehner plan B fiscal bill, and ahead of further fiscal cliff talks heading into the end of the week. T-notes settled at 132.05+ down 4 ticks.
20 Dec 2012 - 20:06 - - Source: RANsquawk
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