Cheaper To Start The Week

TYM2-0-09+ at 121-30, within the boundaries of Friday’s range & 0-02+ off the base of the contract’s 0-07+ Asia range. Volume is light at ~80K, limited by the observance of a Chinese holiday. Note that meaningful technical support isn’t seen until the Mar 28 low & bear tigger (120-30+), while Friday’s low (121-24), may provide a less significant area of technical support. Cash Tsys are 1.5-3.0bp cheaper on the day, bear steepening.

• TYM2 has been on the defensive during the first Asia-Pac session of the week, with oil prices initially softening (likely on the back of weekend comments from the Iranian Foreign Minister who suggested that the country is close to reaching an accord with the U.S. re: restoring the 2015 nuclear pact & the extension of tough social mobility restrictions in the Chinese city of Shanghai, alongside requirements for COVID nucleic testing), with losses holding as oil rebounded and the Hang Seng led regional equity indices higher in the wake of seemingly positive weekend steps from China re: U.S. audit demands when it comes to Chinese ADRs .
• The above factors overpowered any influence from the Russia-Ukraine situation. Note that a fresh round of Western sanctions on Russia is seemingly inbound, with the Russian pullback from around Kyiv resulting in some grim imagery, triggering fresh accusations of war crimes surrounding the deaths of Ukrainian civilians. Elsewhere, Russia has noted that talks with Ukraine have not progressed enough to facilitate a meeting between the Presidents of the countries and that the country’s position on the status of Crimea and Donbas remained unchanged. This came after a Ukrainian negotiator suggested that enough progress had been made for such a meeting to take place. Online talks between the two nations are set to continue on Monday.
• Weekend Fedspeak saw NY Fed President Williams suggest that the Fed needs to move its policy settings towards a more neutral stance, but the pace at which it tightens will depend on the economic reaction. He also noted that the Fed could start trimming its B/S as soon as the next FOMC meeting, with inflation risks becoming "particularly acute." San Francisco Fed President Daly (’24 voter) acknowledged that the case for a 50bp rate hike in May had grown, while tipping her hat to the likelihood of multiple 50bp adjustments further down the line.
• Looking ahead, durable goods & factory orders data will headline during NY hours. Focus will also fall on the dynamic surrounding Russia’s latest sovereign bound payment and the aforementioned Russia-Ukraine talks.