Cheaper On Monday, 2s10s Inversion Deepest Since 1981

TYM3 deals at 111-03+, +0-04, in line with levels seen late in the NY session.

• Cash Tsys finished 1-3bps cheaper yesterday. 2s10s Inversion printed at the deepest level seen since late 1981 before moderating.
• Cross-market pressure from EGBs, as ECB's Holzmann called for 4 consecutive 50bp hikes, saw Tsys retreat from pre-NY session highs.
• A fresh bid then kicked in in early NY dealing, as participants adjusted to weekend news flow (centered on the Chinese GDP growth target).
• U.S. data was mixed, U.S. factory orders printed marginally firmer than expectations whilst final Durable Good Orders were in line with estimates.
• Tsys continued to weaken through the NY session despite the absence of a headline driver, before marginally paring losses into the close.
• Momentum in the $IG issuance slate seemed a likely driver for the weakness the NY session wore on, with continued spill over pressure from the German FI space noted post-Holzmann.
• The RBA's Monetary Policy decision headlines in Asia-Pac hours. Further out we have Wholesale Inventories and Consumer Credit, but it will be Fed Chair Powell's semi-annual Monetary Policy report to the Senate Banking Committee that provides the highlight.