Cross-Asset Flows Dominate In Muted Asia Session, Powell In Focus

TYH3 deals at 114-17, -0-03, in the middle of its narrow 0-07+ range on volume of ~75K.

• Cash Tsys are flat to 1bps richer across the major benchmarks as we approach the European session.
• Cross-asset flows came to the fore as local participants seemed more willing than usual to remain sidelined ahead of Fed Chair Powell’s Tuesday address.
• After a muted start, Tsys richened as pressure on the USD, as USD/CNH printed its lowest level since mid-August, and a recovery off session lows in U.S. equity futures aided the space.
• The USD then pared its losses, and U.S. equity futures re-tested session lows, briefly pressuring Tsys which marginally cheapened before recovering to again deal richer as the USD gave up its gains to deal a touch softer.
• The space looked through the Tokyo CPI print, in which headline and core-core readings ticked up in line with expectations. The core print came in a touch above expectations.
• Fedspeak from Chair Powell headlines today's docket, while wholesale inventories is also on the wires. On the supply side, we will see the latest 3-Year Tsy auction.