CORRECT: Modest Cheapening Extends A Little

Nothing in the way of meaningful headline flow to counter the early cheapening in Tsys as the space continues to leak lower, with the major benchmarks running 1.5-3.0bp cheaper as the curve bear steepens a little. TYH3 trades around the base of its 0-05+ range, last -0-04. We note continued worry surrounding the Chinese bond market (resulting in related liquidity injections from the PBoC over the last couple of days, via both short- and medium-term facilities) as a potential source for the modest cheapening witnessed thus far, alongside the Asia-Pac reaction to Thursday’s ECB meeting.