U.S. Tsy Curve Slightly Bear Flattens As Dust Settles After Fed

The final Asia-Pac session of this lunar year allowed core FI markets to catch a breath after a volatile week dominated by the Fed's hawkish rhetoric and simmering Russia tension. A strong earnings report from Apple has helped soothe the nerves, lending support to U.S. equity index futures.

• T-Notes held a tight range, with a mild bearish bias. TYH2 last trades -0-03 at 127-18, near session lows. Eurodollar futures run 1.0-1.5 tick lower through the reds. Cash Tsys slipped across the curve, with yields last seen 0.8-1.8bp higher at typing. The curve flattened at the margin, with 10-Year Tsys leading losses. Core PCE Price Index & U. of Mich Sentiment headline the U.S. data docket on Friday.
• JGB futures faltered after the re-open to stabilise later on. JBH2 last operates at 150.78, 3 ticks above previous settlement. JGBs are broadly softer, with a degree of steepening evident in cash trade, as the super-long end underperforms. A deceleration in Tokyo CPI inflation underscored the need for the BoJ to stand by their ultra-loose policy stance.
• ACGB curve flattened in cash Sydney trade, with yields last seen 4.3-7.0bp lower. YM remains elevated and last sits +4.0, with XM +6.5 after trading sideways. Bills trade 3-4 ticks higher through the reds. The front end caught a light bid in the afternoon, even as domestic headline flow remained light. It is worth noting that around that time, the WSJ published an opinion piece noting that the RBA could "categorically rule out the idea" that raising interest rates in lockstep with the Fed "is an option." The auction for A$1.0bn worth of ACGB May '32 came and went.