Pressured After First Republic Bank Rescue

TYM3 deals at 114-08, +0-02, in line with late NY levels.

• Cash tsys finished 5-27bps cheaper across the major benchmarks, the curve bear flattened.
• Tsys were pressured as risk-on sentiment tied to a $30bn rescue package for First Republic Bank, 11 major US banks are to deposit $30bn with First Republic, saw US Equities climb to a weekly high.
• Earlier in the session there was spillover from EGBs as the ECB raised rates 50bps, a surprise to the upside. The overall takeaway was slightly more dovish as the ECB shied away from providing forward guidance and an MNI source reported all four or so dissenters preferred no hike.
• Data was mixed yesterday, jobless claims were lower than expectations and there was a strong building permits print. Non-oil import prices fell and there was a sharp fall in Philadelphia Fed Manufacturing shipments and new orders.
• Fed dated OIS have pared back rate cut expectations. A terminal rate of 4.92% is seen in May with ~70bps of cuts priced for 2023.
• There is a thin data calendar in Asia-Pac today. Further out we have the final read of Eurozone CPI, US Industrial Production and UofMich consumer sentiment.