Tight Ranges In Play

Continued warnings from the U.S. State Department re: regions directly related to the well-documented Russia-Ukraine tension (namely Belarus & Moldova) have underpinned U.S. Tsys during Asia-Pac trade, although ranges remain tight. TYH2 last +0-04+ at 126-04 operating within the confines of a 0-05+ range, last dealing 0-02+ off best levels. Meanwhile, cash Tsys run ~1bp richer across the curve.

• Factors that may have limited the bid include:
• A continued lack of outright escalation re: Russia & Ukraine.
• U.S. e-mini futures managing to edge away from worst levels of the session, last printing 0.2-0.4% higher on the day.
• The PBoC’s decision to leave the rate applied to its 1-Year MLF operations unchanged. Although this was in line with the wider consensus, 11 of the 27 surveyed by BBG looked for between 5-10bp of easing (note that the unchanged rate came alongside a net MLF injection of CNY100bn). Any change to the rate applied to the Bank’s MLF operations is often viewed as a precursor, but not a prerequisite, when it comes to movement in the monthly LPR fixings.