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A Little Richer In Asia


Tsys richened overnight, with desks flagging an apparent regional interest in fading Thursday’s cheapening & steepening given the lack of overt game changing drivers evident yesterday (with position squaring and block flow-driven moves evident in NY hours, as well 30-Year auction concession/reaction).

  • Upside options expressions in the form of FVU2 113.00 & TYU2 119.50 calls aided the direction of travel, as did a couple of rounds of screen lifts in TY futures.
  • That leaves TYU2 printing +0-05 at 119-08 ahead of London hours, 0-03 off the peak of its 0-12 Asia-Pac range, although volume isn’t particularly firm, running at ~80K lots.
  • Cash Tsys sit 1.5-3.5bp richer across the curve, with 20s leading the rally.
  • San Francisco Fed President Daly (’24 voter) reiterated her baseline view of a 50bp hike at the September FOMC, although she once again failed to rule out the idea of a 75bp rate hike, stressing the data-dependent nature of monetary policy alongside a need to assess the inflation and labour market data that will cross between now and then.
  • Looking ahead, NY hours will see the latest round of UoM sentiment data (with the inflation expectation components eyed) and Fedspeak from Richmond Fed President Barkin (’24 voter).
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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