A Little Cheaper, TY Support Holds

Cash Tsys sit 0.5-2bp cheaper across the curve, printing a little steeper on the day, with 10s having a brief look through cycle highs in yield terms around the start of London dealing.

• TYZ3 last shows -0-01+ at 107-09 after bears saw momentum wane just above Fibonacci projection support (107-05+).
• Bund gyrations have helped set the tone in recent trade.
• A couple of rounds of Fedspeak were seen in late NY/Asia hours.
• Cleveland Fed president Mester (’24 voter, traditionally a hawk) suggested that a final interest rate hike will likely be needed to boost the fed funds rate to its cycle peak, where it will sit for some time to stabilise prices.
• Elsehwere, Governor Barr stated that Fed officials can be patient in determining the extent of monetary policy tightness needed to bring inflation under control as the economy proves stronger than policymakers had foreseen.
• Pricing on the FOMC-dated OIS strip is little changed on the day, with terminal rate showing at ~5.46% through January ‘24, before 48.5bp of cuts are priced through September ‘24.
• JOLTS job opening data and Fedspeak from Bostic (’24 voter) are due in NY hours.