Curve Flattens In Asia

TYM3 deals at 116-04+, +0-01, a touch off the top of the 0-10 range on volume of ~61k.

• Cash tsys sit 2bp cheaper to 2bp richer across the major benchmarks. The curve has twist flattened pivoting on 5s.
• Tsys were pressured in early dealing as local participants digested a Bloomberg source piece from Friday which suggested that US authorities are considering expanding an emergency lending facility for banks in ways that would give First Republic Bank more time to shore up its balance sheet. CNBC also noted at the weekend that deposits moving from smaller regional banks to big institutions have slowed to a trickle in recent days.
• There was little follow through on the early downtick lower, tsys recovered from session lows as a lack of immediate offering of policymaker support for the US banking sector on Monday added a layer of support.
• Tsys respected narrow ranges for the remainder of the Asian session with little follow through on moves.
• Minneapolis Fed President Kashkari noted yesterday recent bank turmoil has increased the risk of a US recession but it was too soon to judge what that means for monetary policy.
• In Europe today we have a thin data calendar, IFO Business Climate Index from Germany provides the highlight. Further out Dallas Fed Manf. Activity headlines an otherwise thin docket. The latest 2 Year supply is also due.