Curve Bear Flattens On Friday

TYM3 deals at 115-12, -0-02, in line with levels seen late in Fridays NY session.

• Cash tsys finished 5-9bps cheaper on Friday across the major benchmarks. The curve bear flattened.
• The latest round of US data saw tsys pressured, UofMich sentiment survey showed consumers expect prices to rise at 3.2% Y/Y over the next 5-10 years which is a 12 year high.
• Despite the absence of any further headline or flow trigger losses extended through the NY session as rate cut expectations for 2023 eased.
• FOMC data OIS price a terminal rate of 5.1% in June, there are ~70bps of cuts priced in 2023.
• Fedspeak from Chicago Fed President Goolsbee and Fed Governor Bowman reiterated comments seen in previous communique that the bank will need to raise rates further if inflation stays elevated.
• 1-Year MLF from China provides the highlight in todays Asian session. Further out Empire Manufacturing will cross. Fedspeak from Atlanta Fed President Bostic, Chicago Fed President Goolsbee and Minneapolis Fed President Kashkari will cross.