2s10s Curve Threatens Cycle Low Post-Fed

Tsys bear flattened overnight, but operate off of extremes, with marginal support derived from the post-BoJ move in JGBs, leaving cash Tsy yields a little off of session highs. The major benchmarks run little changed to 6bp cheaper across the curve, bear flattening. TYZ2 deals m the middle of its 0-12 overnight range on solid volume of ~105K lots.

• The 2-/10-Year spread hovers close to the deepest levels of inversion witnessed in the current cycle, while the 5-/30-Year spread printed fresh cycle lows overnight.
• 2-Year Tsy yields hit fresh cycle highs as Asia-Pac participants reacted to the FOMC and faded the richening that was seen in late NY dealing.
• The above flattening has been aided by a shift higher in terminal rate pricing, which has nudged up to near 4.70%, per Fed dated OIS.
• Eurodollar futures run 3.5-17.5bp cheaper through the blues, with the reds leading the weakness.
• Overnight flow was headlined by 2x 5K block sales of FVX2 108.50 puts.
• Thursday will see weekly jobless claims data and the Kansas City Fed m’fing index reading cross during NY hours, while the BoE decision headlines a busy global central bank slate.