Light Bull Steepening Overnight

Tsys richened at the margin in Asia with the major cash Tsy benchmarks running 1.0-2.5bp richer at typing, bull steepening.

• TYU2 stuck to a narrow 0-05+ range, last +0-05 at 117-25, running on volume of ~81K (~33K of which is roll-related).
• Weakness in Chinese equities, with focus back on woes for the property sector, provided some incremental support.
• Still, participants were seemingly happy to remain on the sidelines ahead of the upcoming Jackson Hole symposium.
• A Q&A session with Minneapolis Fed President Kashkari (’23 voter) failed to provide any surprises, as the former dove underscored the need to fight inflation, highlighting the lack of trade-off between the central bank’s inflation and employment mandates at present, noting the Fed can only relax re: rate hikes when there is compelling evidence of inflation heading towards 2%.
• TU (3,279) & UXY (1,014) blocks headlined on the flow side, crossing at the same time, although both appeared to be sellers (there was a clear DV01 overweighting to FV if it was a curve play).
• Wednesday will see the release of prelim durable goods data, pending home sales and MBA mortgage apps, in addition to 5-Year Tsy & 2-Year FRN supply