Move Away From Yesterday’s Yield Lows Extends

Tsy yields continue to extend their pull away from yesterday’s lows, leaving cash Tsys running 1.5-5.5bp cheaper as the curve bear flattens, while TYU3 is -0-11, 0-01+ off the base of its 0-12+ session range. Outside of yesterday’s extremes, initial technical parameters in TY futures are now relatively wide vs. prevailing levels.

• Hawkish Fedspeak from Governor Waller and another intensification in speculation surrounding a BoJ YCC tweak provided the focal points of overnight news flow, while firmer than expected Swedish CPI readings were noted in the Asia-London handover.
• Since then, a RTRS source piece noting that “China's financial regulators have invited some of the world's biggest investors to a rare symposium next week, seeking to encourage foreigners to keep investing in the world's second-largest economy despite its recent weakness and rising geopolitical tensions.” One to watch in the macro sphere.
• FOMC-dated OIS continues to price a 25bp hike at this month’s meeting with near certainty, while ~30bp of cumulative tightening is showing through November. Beyond there ~81bp of cuts are priced come June ’24.
• Prelim UoM sentiment data (particularly inflation expectations) and Fedspeak from Goolsbee (’23 voter) provide the highlights of the NY docket. A quick reminder that the FOMC goes into pre-meeting blackout this weekend.