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Slightly Richer Ahead Of Tonight's US CPI Data, Post-JGB Auction Spillover

US TSYS

TYH4 is currently trading at 110-15, +0-04+ from NY closing levels.

  • Cash tsys are 1-3bps richer across benchmarks after reversing early Asia-Pac session weakness.
  • There has been no meaningful newsflow so far in the session.
  • Asia-Pac session strength appears tied to spillover from the post-5Y auction rally in JGBs. In contrast to the recent 2-, 10-, and 30-year supply, which experienced challenges in market digestion, today’s outcome stands out.
  • Nevertheless, investors are likely to remain close to the sidelines in anticipation of the US inflation data scheduled for later today and the Federal Reserve's decision on Wednesday.

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