Muted Start, Cash Closed In Asia, Weekly Gains Trimmed On Friday

TYU3 deals at 112-15, -0-03, in line with levels seen late in Friday’s NY session in a muted start to Mondays dealing.

• Cash tsys finished 2-13bps cheaper across the major benchmarks, the curve bear flattened.
• A reminder that cash tsys are closed in Asia today due to the observance of a national holiday in Japan.
• Tsys were pressured on Friday trimming some of the post-CPI gains, marginally extending losses after the preliminary UofMich survey was stronger than forecast. Consumer Confidence ticked higher and inflation expectations rose.
• FOMC dated OIS price a 25bp hike into the July meeting, a terminal rate of 5.40% is seen in November. There are ~75bps of cuts priced to June 2024.
• Monthly economic activity data from China headlines in Asia today, further out we have Empire Manufacturing. The Fed has entered its policy blackout window which runs until the 27 July the day after the next rate announcement.