Bull Steepening Post-FOMC

Tsys firm a touch as a function of some light richening in Bunds through the old Eurex futures open, as regional reaction to the post-meeting FOMC guidance and perhaps some spill over from a BBG sources report noting that “advisers to Chancellor of the Exchequer Jeremy Hunt are increasingly concerned that the Bank of England risks raising interest rates too much in the coming months, potentially pushing the UK into an unnecessary recession” are eyed.

• TY futures have tested Thursday’s high, although bulls failed to force a break, leaving the contract -0-00+, 0-01+ off best levels.
• Cash Tsys are 0.5-4.0bp richer across the curve, bull steepening, with the 2-/10-Year curve ~4bp steeper than pre-FOMC levels.
• FOMC-dated OIS shows a further ~10bp of tightening priced for this cycle, with peak rate pricing covering the November FOMC, before a little over 60bp of cuts shows through June ’24.