Coiling, Eying Event Risk

TYU2 stuck to a narrow 0-04+ range in Asia, last dealing +0-05 at 117-28 on volume of ~63K.

• Cash Tsys run ~1bp richer across the curve after a very limited round of overnight dealing, with participants sidelined ahead of the impending event risk, with no continuation of Monday’s cheapening evident.
• The market looked through Chinese press headlines flagging the potential for further easing from the PBoC.
• Flash PMI data out of Europe and the UK will provide the focal point during London hours, as central banks continue to tighten monetary policy in a bid to quell inflation, with recession risks on the rise.
• Tuesday’s NY session will be headlined by flash PMI readings from S&P Global, new home sales data and the Richmond Fed manufacturing index. Elsewhere, 2-Year Tsy supply is due and Minneapolis Fed President Kashkari (’23 voter) is due to speak late in the NY day/early in Wednesday’s Asia session.
• Participants remain primed for the impending Jackson Hole symposium (Thursday-Saturday), which will be headlined by Fed Chair Powell’s Friday address.