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Curve Flattens On Tuesday, CPI On Tap


TYU3 deals at 111-10+, +0-01+, in line with late NY levels.

  • Cash tsys finished 1bp cheaper to 2bps richer across the major benchmarks, the curve twist flattened pivoting on 5s.
  • In a generally muted session on Tuesday tsys observed a relatively narrow range with perhaps the proximity to today's CPI print keeping participants on the sidelines.
  • A recovery off session lows in NY was seen alongside firming US Equities.
  • The latest 3-Year Supply was on the screws, strong indirect take up and bid/cover ratio were observed.
  • FOMC dated OIS remains stable, a terminal rate of ~5.40% is seen in November with ~60bps of cuts to June 2024. There is ~25bps hike priced into the July FOMC meeting.
  • In Asia today the latest monetary policy decision from the RBNZ provides the highlight. Further out we have the June CPI print, the MNI preview is here, we also have the latest Fed Beige Book due.
  • There are a number of Fed speakers scheduled to cross including Richmond Fed President Barkin, Minneapolis Fed President Kashkari and Atlanta Fed President Bostic. The latest 10-Year Supply is also due.

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