Spill Over From Broader Sentiment At The Fore

Tsys sit off best levels after the early downtick in the major mainland European equity indices provided a fresh catalyst for richening, leaving the cash Tsy benchmarks 1.5-4.0bp richer, with bull steepening in play. TY futures are 0-02+ off their session high, operating within a 0-10 range thus far.

• Broader macro headline flow has been somewhat limited in the early stages of the London morning, saving some Chinese critique of the U.S. re: its approach to Sino-U.S. policy.
• The digestion of a weekend interview given by Minneapolis Fed President Kashkari (’23 voter) to the WSJ would have also factored into pre-NY price action (click for the full story). Just over 50bp of cuts are now priced into the FOMC-dated OIS strip by year-end vs. current terminal rate pricing.
• Early quarterly futures roll activity helps volume to tick over in the background.
• The previously outlined round of Fedspeak and comments surrounding the Biden-McCarthy debt ceiling meeting will be at the fore during NY hours.