2s10s Prints Fresh Cycle Extreme

TYH3 deals at 114-07+, in line with levels seen in late NY trading.

• Cash Tsys finished 2-4bp richer at the bell on Tuesday, with 2s10s inversion printing a fresh cycle extreme at -84.9bp before easing back slightly to finish at -84.1bp.
• US equities fell amid economic warnings from some of the major investment bank CEOs, with hiring slowdowns and pay cuts mooted, aiding the richening in Tsys. The S&P500 closed ~1.4% lower and DXY rose ~0.3%.
• Elsewhere, a tumble for crude oil futures provided another leg of support.
• An FV/TY block flattener helped the general direction of travel for the curve, while tighter long-dated swap spreads also aided the richening.
• OIS markets remained relatviely stable, with a 50bp hike seemingly assured at next week's Fed meeting. Pricing re: the terminal rate fell slightly, down ~3bp to 4.97%.
• In Asia-Pac today we have Q3 Australian GDP figures and Chinese trade balance data. Further out we have weekly MBA mortgage applications, while the latest BoC decision will create some interest in events north of the border.