Curve Flattens On Tuesday

TYU3 deals at 114-00+, +0-07+, in line with late NY levels

• Cash tsys finished 1bp cheaper to 4bps richer across the major benchmarks, the curve twist flattened pivoting on 3s.
• In a quiet day data-wise, tsys were pressured to session lows on spillover from EGBs, rate locking tied to incoming corporate debt issuance also weighed in early in the NY session.
• Tsys firmed off session lows as the S&P500 was buoyed by financial shares which continued to recover from Monday's sell off, which was driven by the potential raising of capital requirements for banks.
• FOMC dated OIS price ~6bps of hikes into next week's meeting, a terminal rate of ~5.25% is seen in July with ~25bps of cuts priced for 2023.
• RBA-speak from Gov. Lowe and Chinese Trade Balance headline in Asia today. Further out we have US Trade Balance and the Bank of Canada's monetary policy decision.