Cheaper After Reversing Post-PPI Gains

TYM3 deals at 115-16+, +0-02, in line with late NY levels.

• Cash tsys sit 1-6bps cheaper across the major benchmarks, the curve has bear steepened.
• Tsys firmed as PPI printed weaker than expectations and Initial Jobless Claims were higher than expected.
• Firmer equities as risk sentiment rose in the wake of the US data, S&P500 was up ~1.4%, and pre 30-Year auction concession weighed on Tsys through the NY session.
• The latest 30-Year auction was on the screws, bid/cover ratio was in line with the previous auction as was indirect take up.
• FOMC dated OIS price ~18bp hike into the May meeting with a terminal rate of 5%. There are ~70bps of cuts priced for 2023.
• There is a thin data calendar in Asia-Pac today. Further out we have US Retail Sales, Business Inventories, Industrial Production and UofMich Consumer Sentiment. Fedspeak from Chicago Fed President Goolsbee and Fed Governor Waller will cross.