Richer On Several Factors On Tuesday, Asia To Assess

TYZ2 deals around late NY levels.

• This comes after Cash Tsys finished Tuesday’s session 5.0-9.5bp richer across the curve, with the 5- to 10-Year zone outperforming.
• Softer than expected U.S. PPI data, suggestions of a slower pace of ECB tightening after the Bank’s December meeting and the now well-documented death of two Polish civilians within the borders of the NATO member country (initially linked to Russian missile fire, although Russia was quick to play down the idea that it fired on Polish territory, while some local press reports pointed to missile debris being the cause of the damage and casualties) allowed the space to firm.
• Meanwhile, recent reports have pointed to NATO holding an emergency Article 4 meeting re: the latter matter on Wednesday, while Poland has confirmed that it has summoned the Russian ambassador in the country after a Russian-made missile “hit” its territory.
• Fedspeak continued to point to the potential for a slowdown in the pace of hikes, while reinforcing the higher for longer idea as central bank officials remain wary of overreacting to a couple of softer than expected inflation readings.
• There isn’t much in the way of tier 1 events slated for Asia-Pac hours, although headline risk surrounding the fluid Russia-Poland situation is obviously elevated. Further out, Wednesday’s NY docket is headlined by retail sales data, 20-Year Tsy supply and Fedspeak from Williams, Waller & Barr. Also note that the 2022 U.S. Treasury Market Conference will be held on Wednesday.