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Looks like Tsys driving the broader bond....>

US TSYS
US TSYS: Looks like Tsys driving the broader bond space in early Asia-Pacific
trade as regional players seem happy to sell the short-end of the U.S. curve
after the cash Tsy re-open on the back the less dovish comments from Bullard in
U.S. hours. Chair Powell also warned against an overreaction. This has wound
back market pricing of a 50bp cut in July. Fed Fund futures are still fully
pricing at least 25bp worth of easing from the Fed next month, although now
price a 25% chance of a 50bp cut (back from ~45% at the Asia/Europe crossover on
Tuesday), per CME Fedwatch. Interpolated OIS/Fed Funds currently price a ~30%
chance of a 50bp cut, per BBBG WIRP.
- Modest bear flattening apparent thus far.
- T-Notes last -04+ at 127-31+, with 10-Year cash Tsy yields at 2.004%.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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