Light Bull Steepening Evident

Tsys are proving a little more resilient than their European/UK peers when it comes to the scale and holding ability of the cheapening move surrounding the firmer than expected UK labour market data, with cash Tsys now 1.0-1.5bp richer on the day and a light bull steepening impulse observed, while TYU3 is +0-07, 0-03+ off the peak of its 0-08+ range.

• Chinese policy dynamics have also been of interest, with the well-documented PBoC cut to the 7-day reverse repo rate followed up by heightened speculation surrounding the potential for wider policy easing (via BBG sources), in addition to cementing expectations for cuts to benchmark interest rates in the coming days.
• This will have garnered further traction after a shallower than expected bounce in the country’s credit data covering the month of May.
• The release of May’s CPI data headlines the NY docket and you can find our full preview of that release here.
• CPI & AHE provide the final major data releases ahead of tomorrow’s FOMC decision.