Fresh November Yield Lows, Before Move Off Best Levels

Continued feedthrough from Tuesday’s dovish communique via Fed Governor Waller reverberated through Asia.

• Elsewhere, spill over from a softer than expected monthly Australian CPI release was more impactful than the hawkish hold from the RBNZ.
• Softer than expected NRW regional CPI data out of Germany then helped the bid extend a little further, before the broader bid in core global FI markets ran out of steam.
• Regional German CPI prints continue to filter out ahead of this afternoon’s national print.
• That leaves cash Tsy yields running 3.0-5.5bp lower on the day, with fresh month-to-date lows seen across the curve and bull steepening in play.
• Bulls now target September yield lows across most of the curve. The exception comes in 2s, which have already moved to fresh multi-month lows, leaving bulls looking to the July base in yields.
• TYH4 lasts shows +0-10 at 110-06+, off best levels of 110-14+.
• Fed Funds futures now show ~110bp of cuts through ’24 on the whole, with a first 25bp cut fully discounted by the end of the May meeting and a little over 10bp of cuts priced through the Mar ’24 FOMC.