February 02, 2023 23:13 GMT
Marginally Richer, Global FI Matters Dominate
TYH3 deals at 115-16, -0-01+, in line with levels seen late in the NY session.
- Cash tsys finished 1-3bps richer, the belly led the bid.
- Tsys firmed as core global FI moved higher after BOE hiked 50bps but acknowledged that the hiking cycle may be approaching its end as inflation is forecasted to return to their 2% target in 2024.
- Gains were extended after the ECB raised rate 50bps, whilst providing hawkish guidance re a subsequent hike President Lagarde noted disinflation in the economy sparking a further bid in core global FI.
- US data came as the policy announcements were on the wires. Initial jobless claims came in lower than expected, stronger than expected productivity pushed labor cost growth to its lowest rate since Q1 2021.
- Tsys retreated from daily highs through the NY session, flow weighed with a 18k TUH3 block sale the highlight.
- Caixin Composite and Services PMI data from China provides the highlight in Asia-Pac today. Further out we have Eurozone PMI and PPI, before US NFP which highlights the session. SF President Daly is the first Fed speaker on the wires post blackout.