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Curve Steepens, Yellen Softens Language On Deposit Insurance

US TSYS

TYM3 deals at 115-25+, -0-06, a touch softer than late NY levels.

  • Cash tsys finished 10bps richer to 5bps cheaper across the major benchmarks. The curve twist steepened pivoting on 20s.
  • Pressure in US equities, led by a decline in regional banks, saw Tsys firm in the NY session.
  • Gains were marginally pared as Treasury Sec Yellen softened her language on deposit insurance, pledging additional actions if warranted.
  • The latest round of US data saw Initial Jobless claims print softer than expected as the measure shows little sign of labour market deterioration. The Q4 Current Account Balance was narrower than expected and New Home Sales were a touch firmer than expected.
  • FOMC data OIS show ~10bps hike in May with a terminal of 4.9%, there are ~90bps of cuts scheduled for 2023.
  • National CPI data from Japan headlines in Asia-Pac. Further out we have flash PMIs from Europe and the US, as well as Durable Goods Orders. Fedspeak from St Louis Fed President Bullard will cross

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