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Heading North


Modi, AMLO Top Major Economy Leader Poll, Macron Last


Under Pressure


Trend Condition Remains Bearish

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Spill over from Friday trade and firmer than expected NZ CPI data has applied pressure to the space early this week, leaving TYZ1 -0-06 at 130-25, looking through initial technical support at 130-25+. BoE Governor Bailey's choice to not pushback on hawkish BoE speculation via a weekend address will also be factoring into the space. This will be outweighing geopolitical worries surrounding China. The weekend also saw PBoC Governor Yi once again play down systemic worry re: Evergrande.

  • Tsys cheapened across the curve on Friday, with 5s leading the weakness as yields there rose by ~7.5bp, while the 30-Year tenor lagged when compared the weakness on the curve, cheapening by ~2.5bp on the day. Pricing re: Fed hikes was at the fore, with a Sep '22 hike now fully priced (per OIS), while odds surrounding a Jun '22 hike are circa 50/50.
  • Stronger than expected U.S. corporate earnings also applied some pressure to the space, as equities rallied, with a stronger than expected round of retail sales also weighing on Tsys.
  • Chinese Q3 GDP data headlines during Asia-Pac hours on Monday. NY hours will see the latest round of U.S. industrial production data, which will be supplemented by Fedspeak from Quarles & Kashkari.