Curve Flattening Maintained As Asia Looks Ahead To FOMC

Cash Tsys run 0.5 bp cheaper to 1.0bp richer across the curve into London hours, with twist flattening evident as the 7- to 10-Year zone leads the bid in 5+-Year paper, while TYZ2 deals in the middle of a narrow 0-06 range on limited volume of ~39K.

• It would seem that the proximity to Wednesday’s FOMC meeting and a lack of macro news flow kept many Asia-Pac participants sidelined.
• 10-Year Tsy yields continue to operate within the uptrend channel drawn off the August lows (as flagged here).
• This month’s Chinese LPR fixings were unch., matching wider expectations.
• Housing starts and building permits data headline the NY docket on Tuesday, with 20-Year Tsy supply also due.
• Note that the Riksbank is set to kick off this week’s monetary tightening, with no fewer than 9 central banks that we cover expected to deliver 487.5bp of cumulative tightening through Thursday, with the Fed headlining.