Tsys Look Through Soft Chinese Data

Tsys have looked through the softer than expected official Chinese PMI data for the month of March, with well-documented issues such as the localised COVID-related lockdowns evident in China & Russia-Ukraine related worry/disruptions already at the fore of participants’ minds. Note that the Chinese policymaking sphere has previously pledged to do more to support the economy, via several well-documented addresses, which is likely limiting any potential post-data follow through when it comes to market action. TYM2 printed through Wednesday’s high on the previously flagged reports pointing to the potential for a meaningful release from the U.S. SPR oil stockpiles, but operates 0-01 shy of its session peak, last +0-08 at 122-28, with a lack of momentum evident after the initial pull higher. Technically, bulls need to force a break through the Mar 23 high (123-12). Cash Tsys sit 1-3bp richer on the day, with bull steepening still in play.