Signs Of ‘Friendly Fire’ On Poland Allow Tsys To Cheapen

Tsys cheapened a touch in Asia, as U.S. President Biden suggested that the missile that hit Polish soil on Tuesday (killing 2 civilians) was “unlikely” to have been fired from Russia, with subsequent source reports pointing to a ‘friendly fire’ type incident surrounding the Ukrainian defence against the ongoing Russian missile attacks. This removed worry re: a direct Russian attack on a NATO member state, pressuring Tsys and supporting e-minis. There was little else to note in the way of tier 1 headline flow.

• That leaves the major cash Tsy benchmarks 3-5bp cheaper across the curve into London hours, with the intermediate zone leading the weakness, while the wings lagged the move.
• TYZ2 deals at the base if its 0-15 overnight range, -0-06 at 112-12, on above average volume of ~125K lots.
• A TY block sale (-1.3K) headlined on the flow side in Asia, with some desks indicating regional real money demand in several pockets of the curve.
• 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.