CORRECT: Curve Steepens In Asia

TYM3 deals at 115-17, +0-14, 0-01 off the top of the contract’s 0-11 range on volume of ~112K.

• Cash Tsys sit 6bps richer to 2bps cheaper across the major benchmarks. The curve has twist steepened, pivoting around 10s.
• Asia-Pac participants initially faded the move seen in the aftermath of the latest Fed decision, perhaps using the opportunity to close out long positions.
• A bid in e-minis and pressure on the USD saw Tsys recover off session lows, before a break in 2-Year yields, through their post-FOMC trough, along with a similar move in year-end FOMC-dated OIS, triggered a fresh flurry of demand.
• Asia-Pac participants generally looked to the dovish elements of Wednesday’s post-FOMC statement and Chair Powell’s communique.
• Flow was headlined by a TU/UXY block steepener (DV01 ~$150K).
• Fed-dated OIS now prices ~10bps of tightening at the May FOMC meeting, with a terminal rate of ~4.90% observed. There are ~80bps of cuts priced for 2023.
• In Europe today we have SNB, Norges Bank and BOE monetary policy decisions. Further out New Home Sales, Initial Jobless Claims and Fedspeak from St Louis Fed President Bullard will cross, as will 10-Year TIPS supply.