May 16, 2022 19:37 GMT
FI futures trade firmer after the bell, off midday highs on moderate volumes (TYM2 just over 1M), yield curves flatter on narrow range (2s10s -2.58 at 30.65) with short end lagging despite several block buy in 5s on the session.
- No obvious headline trigger, Tsys broke upside range soon after the equity open. Little react to morning data (NY Empire mfg index -11.6, new orders -8.8) with two-way trade/inside range by midmorning.
- Nothing really new from NY Fed Williams espousing 50bp hikes next couple meetings, comment "WE DON'T KNOW EXACTLY HOW LONG INFLATION WILL STAY HIGH" not exactly confidence inspiring.
- MNI exclusive w/ Loretta Mester: "With inflation as high as it is, and with expectations for inflation above 2%, you need to take into account that -- at least on the short end -- we’re still at an accommodative stance of policy. And even if we get up to 2.5%, depending on what’s happening on the inflation and expected inflation, we may still be accommodative," she said in an interview.
- Fed speakers resume Tuesday: Bullard, Harker, Kashkari, Mester, Evans through the session, Chairman Powell headlining at 1400ET.
- Deal-tied flow in the mix Monday with just under $10B swappable corporate issuance lead by $3B Paypal 4pt on the day. Gradual start to Jun/Sep Tsy futures rolling kicked off while June option expiration this Friday also added to volume trade.