Bull Steepening Evident In Asia

Tsys faded a portion of Friday’s late cheapening move, which came against a lack of month-/quarter-end related demand. The willingness of Asia-Pac participants to fade the move, alongside the continued struggle for global equities (e-minis are off worst levels after registering fresh cycle lows), allowed Tsys to bull steepen in overnight dealing.

• Some also pointed to the potential stagflationary nature of the latest bid in crude as a supportive factor for Tsys (with a large OPEC+ oil output cut seemingly in the offing).
• The bid in longer dated JGBs also supported the space.
• Cash Tsys run 4.5-7.5bp richer across the curve at typing, while TYZ2 deals 0-03 shy of the peak of its 0-12 overnight range, on volume of ~78K. Note that liquidity was limited by the start of a week-long holiday in China and partial holiday in Australia.
• We haven’t seen much in the way of meaningful headline/data flow during Asia-Pac hours, after continued headwinds for UK Truss in lieu of the unveiling of her fiscal plan and positive advances for the Ukrainian military were noted over the weekend.
• Gilt trade will likely shape wider core FI dealing in early London hours, with final manufacturing PMI readings from across Europe set to provide the data highlights in that window.
• The ISM m’fing survey and Fedspeak from Williams & Bostic headline the NY docket.