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Pelosi Risk Premium Being Built In

US TSYS

The defensive tone continues to manifest in Asia, with the previously alluded to block buy in TY futures (+1.5K) helping underpin the Tsy space as the market fallout related to U.S. House Speaker Pelosi’s impending journey to Taiwan extends.

  • TYU2 last deals +0-21+ at 122-01, 0-01 off the peak of its 0-16+ range, while cash Tsys run 5-6bp richer across the curve.
  • On the headline front note that UDN recently covered comments from Taiwan’s Defence Ministry, which noted that it will strengthen its combat readiness (linked to Pelosi’s trip).
  • In terms of cross-asset flows weakness in the Hang Seng has been notable (trading the best part of 3% lower shortly after the re-open), while e-minis run 0.5% softer on the day and the JPY extends its recent recovery in G10 FX trade.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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