Curve Flattens In Asia

TYM3 deals at 115-26, +0-03, with a 0-07 range observed on volume of ~53k.

• Cash tsys sit 1bp cheaper to 2bps richer across the major benchmarks, the curve has twist flattened pivoting on 3s.
• Improving risk sentiment in Asia saw tsys firm through the session, the USD is pressured and regional equities are higher.
• Earlier in the session Tsys were marginally pressured in early trade as local participants perhaps focused on the headline number of Friday's NFP which saw the unemployment rate tick unexpectedly lower.
• From a flow perspective a block seller in UXY (1,361 lots) was the highlight.
• FOMC dated OIS price a terminal rate of ~5.1% in June, there are ~100bps of cuts priced for 2023.
• There is a thin data calendar in Europe with UK markets closed for the observance of a national holiday. Further out we have Wholesale Inventories and the Fed releases the May 2023 Financial Stability Report.