March 15, 2023 05:58 GMT
Curve Flattens In Asia
TYM3 deals at 113-18+, 0-09, with a 0-12 range observed on volume of ~115k.
- Cash tsys sit 6bps cheaper to 2bps richer across the major benchmarks. The curve twist flattened pivoting around 5s.
- Tsys were cheaper in early trade, as Asia-Pac participants digested yesterday's CPI print, as well as a moderation in concerns over the US banking sector. Weakness in JGBs also weighed on the space.
- The tsy curve built on the flattening momentum seen on Tuesday as tsys moved off session cheaps.
- Fed dated OIS have remained stable in the Asian session, there are ~20bps of hikes priced into next week's FOMC meeting. The terminal rate is seen at ~4.95% in May with ~60bps of cuts priced into 2023.
- There wasn’t much in the way of net impact on Tsys in the wake of the release of the monthly Chinese economic activity data.
- Fed Governor Bowman noted early in the session that the US Banking system is resilient and on solid footing.
- Final read of French CPI, UK Budget and EU Industrial Production headline in Europe. Further out we have Business Inventories, Retail Sales, PPI and Empire Manufacturing.