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Futures Pressured In Early Dealing

US TSYS

TYM3 deals at 115-12, -0-14, in a volatile start to Mondays dealing. The contract gapped lower at the open before marginally paring losses as the UBS takeover over of Credit Suisse as well as the coordinated Central Bank action to enhance the provision of US Dollar Liquidity weighs on tsys.

  • On Friday Cash tsys finished 7-32bps richer across the major benchmarks, the curve bull steepened.
  • Tsys firmed through Friday's session as broad based weakness in domestic and foreign bank stocks saw US equities pressured.
  • Gains extended as the UofMich Survey showed falling inflation expectations and weaker than expected consumer sentiment.
  • In Fed dated OIS re-pricing for 2023 continued, at Friday's close there were 20bps of hikes seen in March and May with a terminal rate of 4.8%. Through December 2023 there are ~100bps of cuts priced in.
  • The fallout from the UBS/Credit Suisse deal as well as the Coordinated central bank action to enhance the provision of U.S. dollar liquidity will dominate in Asia. Data-wise there is a thin calendar today.

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