Curve Flatter, Outrights Operating Just Off Early Yield Highs

The raft of peripheral/final core Eurozone services and composite PMIS do little for Tsys, as the space stabilises over the last hour or so.

• That leaves TYZ3 -0-08 at 108-03+, 0-01 off the base of a narrow 0-05 range.
• Cash Tsy yields are little changed to 3.5bp higher across the curve, with bear flattening seen.
• Macro headline flow has been light outside of the aforementioned PMI run out of Europe.
• FOMC-dated OIS prices a modest ~4bp of additional tightening through the January ‘24 meeting, as the move away from Friday’s post-data dovish extremes extends a little. Further out, ~32bp of cuts are seen through June ’24 (vs. current effective levels) i.e. a 25bp cut is more than fully priced over that window.