Curve Bear Flattens In Asia

TYM3 deals at 113-04, -0-09+, a touch off the base of the 0-09+ range on volume of ~146k.

• Cash tsys sit flat to 3 bps cheaper across the major benchmarks, the curve has bear flattened.
• Early in the session Tsys briefly extended higher before paring gains as Fitch placed the US on negative ratings watch as the deadline for an increase in the debt ceiling approaches.
• Tsys were pressured after a statement from the US Treasury noting that the Fitch report shows the swift need for bipartisan action. They also said that brinkmanship over the debt limit does serious harm to business, raises short term borrowing costs and threatens the credit rating of the US.
• TYM3 briefly dealt below support at 113-04, the low from 23 May. The next downside support level is 112-30 61.8% retracement of Mar-24 rally.
• Fedspeak from Atlanta Fed President Bostic crossed, he noted that data will be guiding the Fed on future rate decisions and that it doesn't want to get locked into a particular move.
• In Europe today we have the final read of German GDP, further out a slew of US data crosses including Q1 GDP, Initial Jobless Claims and Pending Home Sales. Fedspeak from Richmond Fed President Barkin and Boston Fed President Collins will cross. We also have the latest 7 Year Supply.