Curve Steepens As Fed Hikes 25bps

TYM3 deals at 115-12+, +0-09+, in line with late NY levels.

• Cash tsys finished 8-26bps richer across the major benchmarks, the curve steepened.
• Tsys firmed yesterday as the Fed delivered a consecutive 25bps hike. Though signalling additional hikes the Fed statement was largely deemed dovish.
• Gains were extended during Chairman Powells press conference, he noted that Fed is no longer stating that ongoing rate increases are appropriate to quell inflation. Instead FOMC now anticipates some additional policy easing may be appropriate. The transcript of Powells press conference is here.
• Earlier in the session tsys firmed off session lows, there was no headline or flow drivers as likely pre FOMC position consolidation dominated.
• FOMC dated OIS show ~12bp hike in May with a terminal rate of ~4.95%. There are ~75bps of hikes seen in 2023.
• RBNZ Chief Economist Conway's remarks on inflation headline an otherwise thin docket in Asia-Pac. Further out we have SNB, Norges Bank and BOE rate decisions. New Home Sales, Initial Jobless Claims and Fedspeak from St Louis Fed Bullard will also cross.