Early Cheapening Holds In Asia

TYM3 deals at 115-07+, +0-01, a touch off the base of the 0-07 range on volume of ~58k.

• Cash tsys sit 2-4bps cheaper across the major benchmarks, the curve bear flattened.
• Tsys were pressured in early dealing as local participants digested weaker-than-expected Chinese PMI data published yesterday as well as Fridays US data.
• An expected deal for First Republic did not eventuate as Reuters reported that regulators have had to ask for bids to be revised although a decision is said to be getting closer.
• Ranges were narrow with little follow through on moves for the remainder of the session.
• FOMC data OIS price a ~22bp hike for this weeks FOMC meeting which headlines the week's calendar, with a terminal rate of ~5.10% in June. There are ~60bps of cuts priced for 2023.
• There is a thin docket in Europe today with the UK and several European countries closed for the observance of national holidays. Further out we have the latest ISM Survey which headlines an otherwise thin calendar.