Cheaper To Start ’24

The start of ’24 corporate issuance out of Europe/the UK and an uptick in crude oil futures surrounding heightened Red Sea tensions has helped pressure Tsys during the initial rounds of ’24 trade.

• TYH4 is -0-18 at 112-10+, printing at the low of its 0-16 range on healthy enough volume of ~150K.
• Cash Tsys were closed overnight, owing to a holiday in Japan (Japanese markets do not re-open until Thursday). They have seen a fairly parallel 5-6bp shift higher in yields since London trade got underway, with the belly leading the weakness at the margin.
• A relatively large earthquake in Japan (which has killed at least ~50 per the most recent headlines) has been seen.
• Caixin Chinese m’fing PMI data was a little firmer than expected, but this came after softer-than expected official readings (size, geographical location and market orientation of firms surveyed in the respective releases are the likely drivers of the divergence).
• The move higher in yields has helped FOMC-dated OIS to firm a touch, although ~153bp of cuts are still priced through ’24.
• Final S&P Global m’fing PMI data and construction spending headline a limited NY data docket.