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Curve Bear Flattens, FOMC In Focus

US TSYS

TYM3 deals at 114-05, +0-01, in line with late NY levels.

  • Cash tsys finished 6-19bps cheaper yesterday across the major benchmarks, the curve bear flattened.
  • Pressure was evident on tsys through Tuesday's session as focus turned to today's FOMC rate decision.
  • FOMC dated OIS currently price a 20bps hike for today's meeting, with a terminal rate of 4.95% seen in May. There are ~60bps of cuts priced for 2023.
  • Earlier in the session Existing Home Sales printed above expectations, rising to 14.5%. The Philadelphia Fed Non-Manufacturing Index printed in contractionary territory.
  • Tsys held near session lows after the latest 20-Year auction tailed, weaker than average indirect take up was observed.
  • There is a thin docket in Asia-Pac today. Further out the Fed rate decision headlines, our preview is here. UK CPI and Initial Jobless Claims will also cross.

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