Cheaper In Asia

TYM2 has nudged higher in recent trade, to last deal 0-12+ at 119-17+, 0-06 off the base of its 0-15 Asia range, on respectable volume of ~115K (given holidays in the likes of Hong Kong, Australia, London & Europe). Cash Tsys are 2.0-3.5bp cheaper across the curve, with 3s leading the way lower and the long end lagging the wider move at the margin.

• Tsys softened in early Asia-Pac dealing. with participants seemingly clinging to the uptick in crude oil (which has moderated from extremes), with that move, at least in part, facilitated by the Chinese city of Shanghai sketching out its re-opening plan.
• Meanwhile, growth negative factors e.g. a smaller than expected RRR cut from the PBoC, the ongoing Russia-Ukraine conflict and wider spread localised lockdowns in China had little impact.
• Chinese economic data was mixed, with firmer than expected Q1 GDP & Mar industrial production at least partially offset by a larger expected fall in retail sales and unexpected uptick in the unemployment rate.
• TYM2 drifted to fresh session lows in the wake of the data release, although the move was by no means immediate, before the aforementioned uptick in recent dealing.
• The latest NAHB housing data print and Fedspeak from Bullard (’22 voter) headline during NY hours.