A Bounce, But Still Lower On Monday

A flat re-open for TYU2, dealing -0-08 at 118-07.

• To recap, an early bid for equities and sharp rebound/rally in crude oil prices applied some pressure to U.S. Tsys from early London hours on Monday, after a limited Asia-Pac session was hampered by the closure of cash Tsy markets owing to a Japanese holiday. Tsys then found a base during the NY afternoon as equities pulled lower on the back of a report suggesting that tech giant Apple will be slowing spending and headcount growth in ’23 (S&P 500 closed -0.8%).
• Still, Tsys didn’t close anywhere near neutral, with the major benchmarks running 5-10bp cheaper come the bell, as 20s led the weakness.
• Hedging activity was noted on a pickup in IG$ issuance as major financials started to come to market post-earnings, although wider volume was limited on the day, with a lack of meaningful headline flow to trade off of.
• Looking ahead, the minutes from the most recent RBA decision and an address from RBA Deputy Governor Bullock provide the risk events of note during Asia-Pac hours, while the COVID and property market situation in China also presents headline risk. Further ahead, NY hours will see the release of building permits and housing starts data.