Free Trial

Curve Flattens In Asia

US TSYS

TYM3 deals at 116-03, -0-05, with a narrow 0-05 range on volume of ~96k.

  • Cash tsys sit 3 bps cheaper to 1bp richer across the major benchmarks, the curve has twist flattened pivoting on 20s.
  • Tsys were marginally cheaper in early dealing, there was no overt headline driver, Asia-Pac participants perhaps using yesterday's richening as an opportunity to exit long positions.
  • Pressure moderately extended as the RBNZ hiked rates 50bps raising the OCR to 5.25%. Markets had priced in a 25bp hike with only 1 economist of the 22 surveyed by Bloomberg looking for a 50bp hike. Screen flow added to the pressure, ~3.3k lots of TY given post RBNZ decision over a couple of clips.
  • Ranges were tight with little follow through on moves for the remainder of the session.
  • Fedspeak from Cleveland Fed President Mester crossed early in today's Asian. She noted that the Fed will weigh credit conditions as it ponders further hikes, also noting she sees the Fed Funds rate above 5% and holding there for some time.
  • There is a slew of US data due today including ADP Employment, Trade Balance, Services PMI and ISM Services survey.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.