Stabilise As 10-Year Yields Fail To Take Out YtD Highs

Tsys find a bit of a base in recent trade with 10-Year yields failing to breach their early ’24 highs (4.1957%), despite fresh YtD highs in German & UK equivalents.

• TYH4 last shows flat at 110-24, 0-02 off the low of the 0-08 range.
• Volume runs at a limited ~168K, with the Chinese New Year holidays and a related half day closure in Hong Kong curtailing activity.
• Cash Tsy yields are 0.5-1.5bp higher on the day, with an incremental steepening bias seen.
• Regional desks flagged some Asia-Pac demand for cash 5s above 4.10%.
• FOMC-dated OIS has seen a moderation in the degree of cuts priced for ’24. Mar ’24 FOMC pricing now shows ~4bp of easing, while ~112bp of cuts are seen through ’24 on the whole, with the latter moving towards the shallowest round of cuts priced during early ’24 (109.4bp last week).
• Recent Fedspeak has placated the need for imminent cuts/pushed back against the degree of easing priced in for ’24. International spill over re: similar moves in core global STIR markets will also have factored in.
• Looking ahead, annual CPI revisions (click for our full preview of that release) will cross in NY hours, with comments from Dallas Fed President Logan also due.