Bear Flattening Asia, 10s Fail To Break 3.00%

TYU2 prints +0-01 at 118-04+, around the middle of its 0-09 range. Cash Tsys are flat to 3bp cheaper across the curve, bear flattening.

• Spill over from Friday’s softness in Tsys and focus on the impending Jackson Hole symposium (due to be held Thursday-Saturday) provided the points of interest overnight.
• 5- to 20-Year Tsys showed below their respective Friday cheaps, with the failure of 10s to break above the 3.00% level in yield terms allowing a base to form overnight.
• A block buy of FV futures (+3K) also helped the space to move away from session cheaps, while Asia-Pac trade also saw some light downside interest expressed via low delta put options (TYUS 115.50 puts).
• Weekend headline flow failed to provide much impetus, with the UK political backdrop, European energy woes, familiar ECB speak and the continuing Russia-Ukraine war headlining.
• Monday’s NY docket is headlined by the latest national activity index reading from the Chicago Fed, although that lower tier data release is unlikely to impact the market.