Under Light Pressure

Tsys come under some light pressure, perhaps with crude oil working away from worst levels (WTI is now nearly ~$2.00 off worst levels of the day). A quick reminder that an FT source report has suggested that “Saudi Arabia has indicated to western allies that it is prepared to raise oil production should Russia’s output fall substantially under the weight of sanctions,” The piece suggested the move may come as soon as today, while noting that production increases scheduled for September would be brought forward to July and August. While welcome, these moves go nowhere near addressing the structural tightness of the global oil market at present, which European traders may be reacting to as they file in. TYU2 last +0-02 at 118-22+, 0-01 off the base of its 0-09 overnight range, on volume of ~125K. Cash Tsys sit flat to 2.5bp cheaper across the curve, bear flattening.