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Light Twist Flattening In Pre-CPI Asia Trade

US TSYS

Cash Tsys twist flattened in Asia-Pac hours, running 0.5bp cheaper to 2bp richer across the curve, pivoting around 3s, with 7s outperforming. TYZ2 looked through Wednesday’s high, before backing off to deal +0-12 at 110-22+, 0-03 off the peak of its 0-08 range, on solid volume of ~95K.

  • Some idiosyncracies in the Antipodean rates space helped support Tsys overnight.
  • Comments from Minneapolis Fed President Kashkari (’23 voter) pushed back against the idea of an impending pivot, suggesting any conflict within the central bank’s dual mandate is some way down the line while underscoring the need to combat inflation.
  • This came after a late NY rally in which Tsys richened to fresh session highs, aided by continued liquidity issues and industry contagion worry surrounding one of the major cryptocurrency exchanges and comments from Chicago Fed President Evans (who retires in early ’23), who pointed to the benefits of slowing the pace of rate hikes “as soon as we can.”
  • Looking ahead, the latest CPI print presents the key risk event on Thursday (see our full preview of that release here: https://enews.marketnews.com/ct/x/pjJscAaBlO0I6aljJh5yGA~k1zZ8KXr-kA8x6jBU5WlpokPj-kWeg ). CPI data will be supplemented by weekly jobless claims data, 30-Year Tsy supply (which comes in the wake of yesterday’s soft 10-Year auction) and a deluge of Fedspeak.
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Cash Tsys twist flattened in Asia-Pac hours, running 0.5bp cheaper to 2bp richer across the curve, pivoting around 3s, with 7s outperforming. TYZ2 looked through Wednesday’s high, before backing off to deal +0-12 at 110-22+, 0-03 off the peak of its 0-08 range, on solid volume of ~95K.

  • Some idiosyncracies in the Antipodean rates space helped support Tsys overnight.
  • Comments from Minneapolis Fed President Kashkari (’23 voter) pushed back against the idea of an impending pivot, suggesting any conflict within the central bank’s dual mandate is some way down the line while underscoring the need to combat inflation.
  • This came after a late NY rally in which Tsys richened to fresh session highs, aided by continued liquidity issues and industry contagion worry surrounding one of the major cryptocurrency exchanges and comments from Chicago Fed President Evans (who retires in early ’23), who pointed to the benefits of slowing the pace of rate hikes “as soon as we can.”
  • Looking ahead, the latest CPI print presents the key risk event on Thursday (see our full preview of that release here: https://enews.marketnews.com/ct/x/pjJscAaBlO0I6aljJh5yGA~k1zZ8KXr-kA8x6jBU5WlpokPj-kWeg ). CPI data will be supplemented by weekly jobless claims data, 30-Year Tsy supply (which comes in the wake of yesterday’s soft 10-Year auction) and a deluge of Fedspeak.