Losses Extend After July FOMC Minutes On Wednesday

TYU3 deals at 109-18, unchanged from yesterday’s settlement level, in a muted start to Thursday's session.

• Cash tsys finished 1-4bps cheaper across the major benchmarks, the belly lead the cheaps.
• Tsys were pressured after the July FOMC meeting minutes, which were more hawkish than expected. The minutes noted that most participants see significant upside risk to inflation which could require further policy tightening.
• Earlier in the session tsys had retreated from best levels, the move came alongside a bid in the USD and pressure on US Equities.
• FOMC dated OIS show a marginal winding back of rate cut expectations in 2024, the terminal rate remains steady at ~5.40% in November with ~60bps of cuts to July 2024.
• The Australian Labor Market Report headlines in Asia, further out we have US initial jobless claims and US Conf. Board leading index.