Cheaper, JGB Matters Dominate Asian Session

TYH3 deals at 115-03, -0-04+, at the lower end of its 0-09 range on volume of ~101K.

• Cash Tsys are 1-3bp cheaper across the curve, with 10s leading the move.
• Tsys were mixed in early dealing before being pressured as weakness in JGBs spilled over, with 10-Year JGB bond yields showing above the BoJ's permitted 0.50% ceiling.
• Tsys continued to feel the pressure as JGBs moved lower still and Japanese swap spreads widened. Although the move in Japanese fixed income has moderated from session extremes into the Tokyo close, presumably on at least some short cover ahead of next week's BoJ meeting, which has allowed Tsys to find a base.
• Fedspeak from Atlanta Fed President Bostic ('24 voter) hit the wires early in the session. There was little reaction in the space as he reiterated themes observed in recent communique, noting that the slowdown in inflation could facilitate shifting the hiking pace to 25bps from next month.
• Block flow was see across the futures curve in Asia-Pac hours, while the most notable flow came via a 30K lift of the TYG3 112/111 put spread.
• UK GDP and French CPI data headline the European session. Further out UofMich Sentiment provides the highlight in NY. There is Fedspeak from Minneapolis Fed President Kashkari and Philadelphia Fed President Harker.