Off Lows, Aided By TY Block Buy

A block buy in TY futures (~$402K DV01) has helped stabilise Tsys, leaving the major cash benchmarks 1-3bp cheaper, with intermediates leading the cheapening. TYU3 is -0-03, around the middle of its 0-13 range.

• JGB direction, as well as a bid in Chinese & HK equities, facilitated the Asia-Pac cheapening, with a move away from lows in e-minis also weighing through the London handover.
• Weekend Fedspeak from Kashkari (’23 voter) did little to move the needle, with FOMC-dated OIS indicating a terminal rate of 5.42% in November, before ~54bp of cuts are priced through June ’24. Chicago Fed President Goolsbee (’23 voter) will speak later.
• The MNI Chicago PMI and SLOOS headline the NY data docket. Fed Chair Powell provided a preview of the SLOOS last week, noting “I would just say it's broadly consistent with what you would expect. You've got lending conditions tight and getting a little tighter. You've got weak demand. And you know, it gives a picture of pretty tight credit conditions in the economy. I think it's really hard to tease out whether, how much of that is from this source or that source, but I think what matters is the overall picture is of tight and tightening lending conditions.”