Light Bear Steepening As Fedspeak & E-Mini Uptick Weighs

The space continues to cheapen, albeit with the move contained in the boarder scheme of things, as the major benchmarks run 2-3bp cheaper alongside a light steepening bias (TU/UXY steepener flow in Asia-Pac/London hours was seen and flagged previously). TYM3 moves to fresh cheaps in recent dealing, now operating at the base of an 0-11 intraday range. The latest uptick in e-minis will have helped to apply some fresh weight to Tsys.

• To recap, comments from Fed Governor Bowman initially helped bias the space cheaper during early London hours, as she noted that the recent economic data have not provided evidence that inflation is on a clear downward path and the Federal Reserve may need to tighten monetary policy further.