Curve Bulls Steepens, Gains Pared As Credit Suisse Receives Liquidity Backstop

TYM3 deals at 115-07, +0-03, in line with late NY levels.

• Cash tsys finished 16-36bps richer across the major benchmarks on Wednesday. The curve bull steepened.
• 2s10s inversion climbed to its highest level since mid-October, before paring gains in late trade.
• Tsys pared gains from session highs as the Swiss central bank and financial regulator said Credit Suisse will receive a liquidity backstop if needed. US Equities firmed off session lows and the USD marginally pared gains.
• Earlier in the day, Tsys firmed through the European session as concerns over the European banking sector escalated as Saudi National Bank, the biggest share in Credit Suisse, said they would not provide any further investment.
• Gains had extended after a soft PPI and Retail Sales prints. Empire Manufacturing also surprised to the downside.
• Fed dated OIS pared back rate hike expectations, there are now ~23bps of hikes with a terminal rate of 4.80% seen in May. There are over 100bps of cuts priced in for 2023.
• The latest labor market report from Australia headlines in Asia-Pac. Further out we have the ECB Monetary policy decision, as well as jobless claims, Housing Starts and Philadelphia Fed Manufacturing Index.