Curve Flattens, CPI In Focus

TYH3 deals at 112-27+, +0-02+, in line with levels seen late in the NY session.

• Cash tsys finished flat to 4 bps richer, as the curve flattened on Monday.
• Fed Gov Bowman was on the wires, she reiterated comments seen in previous communique that further rate increases are required and rates will need to remain elevated to restore price stability.
• The latest NY Fed survey showed one-year inflation expectations were little changed in January, the survey also saw wage growth expectations for the year ahead moderating.
• A brisk pace of corporate issuance and related hedging activity weighed as Tsys retreated from session highs.
• Several late block buys of FV (+6.6K) and TY (+16.9K) as well as a rate lock unwind following $18.45bn in swappable corporate bond issuance provided late support.
• The announcement of the new BOJ Governor (11am Tokyo, 2am London) headlines the Asia-Pac session. Further out, U.S. Jan CPI is in focus, prior to that UK employment data and Eurozone GDP is on the wires. Fedpeak from Richmond Fed President Barkin, Dallas President Logan, Philadelphia Fed President Harker and NY Fed President Williams will also cross.