Curve Bull Steepens, 2-Year Yields Largest One Day Decline Since 1980s.

TYM3 deals at 114-13+, -0-07+, in line with late NY levels.

• Cash tsys finished flat to 61bps richer across the major benchmarks. The curve bull flattened.
• 2-Year Yields fell ~61bps, the largest one day decline since October 1982, surpassing the 50bps fall of 15 Sep 2008.
• Short end yields continued to firm in the wake of the collapse of SVB and NYs Signature Bank. All deposits at SVB will be guaranteed and the Feds Bank Term Funding Scheme will value collateral at par.
• On the sell side, Nomura became the first bank to call for a rate cut. They look for 25bps cut from FOMC in reaction to the looming financial stability risks.
• Barclays, Natwest and Wells Fargo all joined Goldmans in calling for a pause. Deutsche Bank revised their terminal rate forecast down 50bps to 5-5.25%, that still sees another 50bps of hikes from current levels.
• In Fed dated OIS has ~20bps of hikes priced into what is left of the hiking cycle, with ~14 hikes priced for March. The terminal rate is now seen at ~4.8% in May. There are ~100 bps of cuts priced in before the end of 2023.
• There is a thin data calendar in Asia-Pac today. Further out the highlight is February's CPI print, our preview is here.