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Asia Set To Assess Bull Steepening

US TSYS

TYU2 is marginally firmer after the re-open, but still comfortably within the confines of Monday’s range, last dealing +0-02+ at 119-25.

  • To recap, the Tsy curve was subjected to bullish steepening on Monday, with the major benchmarks running 1-6bp richer come the close of NY dealing.
  • Softer than expected second tier domestic data (Empire manufacturing & NAHB housing market index, which are sensitive to interest rate cycles) provided a bid during early NY dealing after the space had retraced from early European morning cheaps. Signs of receiver-side flows as 5+-Year swap spreads tightened also supported the rally.
  • The space finished a little shy of best levels, perhaps tempered by the marginal uptick in equities, which in itself was a product of the lower yield environment after shaking off the impact of weaker than expected Chinese & domestic data. A reminder that the soft Chinese data and latest round of easing from the PBoC had a limited impact on the space during Monday’s Asia-Pac session.
  • The minutes from the latest RBA monetary policy decision headline the broader docket during Asia-Pac hours. Further out, Tuesday’s NY docket sees the release of housing starts and building permits data, as well as industrial production.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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