It should come as no surprise that the 2y10y Treasury yield spread closed below zero yesterday for the first time this cycle. That’s because punters significantly scaled back their ECB/Fed easing bets ahead of Chair Powell’s Jackson Hole speech this afternoon. At pixel time the low point of the 1-month USD OIS forward curve is 1.07, up from 0.94 last Friday. Its Eurozone counterpart rose from a cyclical low of a low of -0.81 to -0.70.

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