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TYM2 Just Off Wednesday Lows

US TSYS

TYM2 is incrementally higher at the re-open, last dealing +0-02+ at 126-20. This comes after the U.S. flagged the potential for Russia to deploy chemical or biological weapons in Ukraine (at the same time as pushing back against Russian claims re: the U.S. development of such weapons in the country)

  • To recap, TYM2 went out at worst levels of the day on Wednesday, with cash Tsys finishing 8-11bp cheaper.
  • This came as equities surged higher, with some pointing to hope stemming from Tuesday’s round of comments made by the Ukrainian President (in which he flagged to an openness to discussions re: the LPR & DPR separatist regions, in addition to dropping his push to join NATO) & subsequent comments from one of his aides highlighting the potential for a diplomatic solution to the Russia-Ukraine conflict. Although security guarantees will be required, while rhetoric surrounding an unwillingness to trade any of the Ukrainian territory tempered optimism a little later in the day (the President himself pointed to a need for certain compromises from both sides, while he stressed the need for direct discussions between himself and his Russian counterpart when it comes to ending the conflict). The U.S. choice to decline Poland’s offer of deploying fighter aircraft to one of its German bases probably helped broader sentiment as well.
  • A $30bn jumbo multi-tranche round of issuance from AT&T/Discovery applied further pressure to the space.
  • 10-Year Tsy supply was solid enough, although the 0.3bp tail, coupled with a dip in the cover ratio to slightly below average levels and an uptick in dealer takedown (from historic lows in Feb) provided some light selling pressure during early NY afternoon dealing.
  • There isn’t much in the way of meaningful economic data slated for Asia-Pac hours, while CPI, real average earnings data and weekly jobless claims will cross during the NY session. Further afield, focus will fall on the latest ECB monetary policy decision. Finally, we will also get 30-Year Tsy supply.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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