Late Stock Rout Adds to Strong Risk-Off Rate Support

Rates continued to climb Tuesday, curves steeper (2s10s +4.674 at 23.449) as short end support remained strong while long end trades off midday highs after the bell, 2YY -.1212 at 2.5045%, 30YY -.0467 at 2.8417%.

• Short end support remained robust as market tamps down on market pricing in chances of 75bp hike(s), back to pricing in nearly five 50bp hikes over the next six meetings.
• Stocks extended rout after the bell, SPX eminis down over 3% after Alphabet Q1 EPS $24.62 Misses $26.11 Estimate, Sales $68.01B Beat $68.00B.
• Geopol risk contributing factor to FI support: Russia's state-run RIA reporting comments attributed to the Russian Ministry of Defence stating that 'London's direct provocation of Kyiv to strike targets on Russian territory will lead to a proportional response'.
• Crude rebounded as Russia moved to sever Poland from gas supplies, tit-for-tatt after Poland sanctions Gazprom among 50 Russian firms and oligarchs. WTO +3.76 in late trade at 102.30.
• Decent 2Y sale, Tsy futures holding firmer (curves steeper) after $48B 2Y note auction (91282CEK3) stops through: 2.585% high yield vs. 2.595% WI; 2.74x bid-to-cover surge vs. last moth's 2.46x.
• After the bell, the 2-Yr yield is down 8.1bps at 2.5443%, 5-Yr is down 6.4bps at 2.7954%, 10-Yr is down 5bps at 2.7701%, and 30-Yr is down 2.3bps at 2.8654%.