Holding Lower

The curve has bear flattened in Asia-Pac dealing, with the major benchmarks running 2.0-3.0bp cheaper across the curve, while TYM2 futures operate 0-01 above the base of their 0-10+ session range, last -0-08+ at 120-07+. There were some limited gyrations around the RBNZ’s 50bp OCR hike, although the fact that the market had mostly priced in such a move (42bp of tightening was observed in RBNZ dated OIS pre-decision vs. sell-side consensus which looked for a 25bp hike) and the RBNZ’s choice to flag comfort with its Feb OCR outlook (with OIS market pricing much more aggressive than the Bank’s central forecast on the matter), alongside its choice to move by 50bp today to promote future optionality, preventing a hawkish takeaway and limiting any space for weakness in bonds.

• An uptick in e-minis will be applying some pressure, at the margin (the S&P 500 contract is +0.5%), although we haven’t seen much in the way of meaningful news flow to drive that move.