A Touch Softer

Tsys cheapen in early London trade, with a lack of headline flow noted as 2-Year yields look through yesterday’s post-SVB high. The major yield benchmarks sit 0.5-2.5bp higher on the day, bear flattening. The 2-/10-Year curve sits a handful of bp off recent inverted extremes, after registering the deepest level of inversion since March’s regional bank tumult in recent sessions. TYU3 moves through Asia-Pac lows, although hasn’t challenged yesterday’s base, last printing -0-01, 0-01 off the base of its 0-06+ range.

• Chinese PMI data did little for the space overnight, with a steady rate of contraction seen in the manufacturing reading, while the rate of expansion in the non-manufacturing PMI reading continued to slow.
• Yesterday’s hawkish data-inspired adjustment leaves ~21bp of tightening priced into the FOMC-dated OIS strip for the July gathering, with a cumulative ~35bp of tightening showing through November. Beyond there, ~54bp of cuts are showing through the June ’24 FOMC.
• Eurozone CPI presents the highlight of the European session, while the PCE data suite and MNI Chicago PMI will be eyed in NY hours.