Muted Start, Cash Closed On Monday

TYU3 deals at 113-02+, +0-01, in line with levels seen late on Friday in a muted start to the week.

• Cash tsys finished 2-7bps cheaper across the major benchmarks, the curve bear flattened. A reminder that cash tsys are closed today due to the observance of a US national holiday.
• Tsys were moderately pressured through Friday's session, participants using the post UofMich rally to close out long positions ahead of the long holiday weekend. 1 Year Inflation Expectations fell to 3.3% from 4.2%, although sentiment was firmer than expected.
• Richmond Fed President Barkin noted that slowing the pace of hikes gives the Fed more time to assess data and that the Fed can do more if slowing demand doesn't lower inflation. Gov Waller said that as the labour market is still strong and core inflation is sticky there is probably going to be some more tightening to try and tame price pressures.
• FOMC dated OIS price ~18bps of hikes for the July meeting, a terminal rate of 5.30% is seen in September with 10 bps of cuts priced for 2023.
• There is a thin data calendar in Asia today, further out the calendar for the week is highlighted by Housing Starts, Philadelphia Fed Non-Mfg Index and Jobless Claims.