Light Bid In TYM2

TYM2 catches a very light bid as comments from a U.S. Tsy spokesman are run on RTRS. The spox notes that the Tsy will not permit any USD debt payments to be made from Russian accounts at U.S. financial institutions. Our first thought is that the U.S. is seemingly trying to force default on Russia, with the country trying to pay USD-denominated coupons on Monday (although grace periods and FX conversion covenants could mean that this is not a black and white matter). The contract last deals at 122-09+, +0-06+on the day. Asia-Pac participants have allowed Monday’s twist steepening impulse to spill over into the region, with 3s providing the richest point on the curve, firming by 2.5bp thus far, while 20s and 30s sit ~0.5bp cheaper. Higher Oil prices continue to exert influence over the front end via the economic growth impulse, while the twist steepening is likely derived from Monday’s NY session, as mentioned, with Monday’s move at least partially attributable to something along the lines of profit taking/consolidation after the recent aggressive flattening.