A Touch Firmer

Tsys nudge firmer at the margin with the major cash benchmarks running 1.5-3.0bp richer as the curve bull flattens.

• We noted earlier that Asia-Pac participants may be paying more attention to the firm 3-Year Tsy auction breakdown and lack of fresh monetary policy steer from Fed Chair Powell than the issuance related weakness observed Tuesday, which is seemingly prompting them to fade Tuesday’s cheapening in the space.
• Elsewhere, continued talk of the potential for the easing of the PBoC’s monetary policy settings during H123 (via RRR and LPR cuts), in a bid to ensure “reasonably abundant liquidity” and lower financing costs for the real economy and property sector (via analysts commenting in a major state-run media outlet), may also be helping at the margin.
• Note that the broad USD has nudged higher in recent dealing, while e-minis have ticked lower.