Curve Steepens In Asia

TYU3 deals at 111-31, -0-03, a range of 0-05+ on volume of ~43k.

• Cash tsys sit flat to 2bps richer, light bull steepening is apparent.
• Tsys firmed as Chinese and HK equities rose in early dealing as China’s July Politburo statement buoyed risk appetite. However the move did not follow through and tsys marginally pared gains dealing in a narrow range for the remainder of the session.
• Earlier there had been a muted start to the days dealing, perhaps the proximity to tomorrow's FOMC rate decision kept participants on the sidelines.
• FOMC dated OIS price a 25bp hike into Wednesday's meeting, with a terminal rate of ~5.40% in November. There are ~60bps of cuts priced to March 2024.
• There is a thin docket in Europe today, further out we have House Prices, Consumer Confidence and Richmond Fed Mfg Index. The latest 5-Year Supply is also due.