A Touch Cheaper In Asia

The curve has bear steepened in Asia-Pac dealing, with the major benchmarks running little changed to 3.0bp cheaper across the curve, while TYM2 futures operate 0-02+ above the base of their 0-10+ session range, last -0-07 at 120-09.

• Tsys briefly joined the post-RBNZ squeeze higher, although the ACGB space is much more susceptible to RBNZ-related moves given the close geographical ties/historical cross-market correlations observed.
• Some cash Tsy selling around the re-open was enough to more than reverse the initial uptick in futures with hawkish comments from Messrs Bullard (’22 voter) & Barkin (’24 voter) observed overnight.
• Flow was dominated by block sellers of futures, covering the TU (-3,485) & TY (-2,107) contracts.
• An uptick in e-minis will have applied some pressure, at the margin (the S&P 500 contract is +0.5%), although we haven’t seen much in the way of meaningful news flow to drive that particular move.
• Looking ahead, Wednesday’s NY session will bring the release of PPI data for March, 30-Year Tsy supply and Fedspeak from Governor Waller. The latest BoC monetary policy decision will also provide some interest.