Under Pressure On Chinese Stimulus & As Waller Echoes Powell

Cash Tsys run 5-8bp cheaper across the curve after their elongated weekend, bear flattening. Meanwhile, TYZ2 deals around the midpoint of its 0-09+ range, printing -0-09+ at 112-00+ on healthy volume of just under 125K into London hours. Note that all of the major benchmarks operate comfortably within their recent respective ranges.

• News of a notable round of support for the Chinese property space, coupled with some hawkish Fedspeak from Waller (who echoed tones from Chair Powell’s post-meeting press conference, while conceding that the Fed could step the pace of hikes down to 50bp in December) applied some pressure in early Asia-Pac trade.
• Note that an FT interview with San Francisco Fed President Daly got far less attention, with the piece seeing Daly stress focus on the level of terminal interest rates, as opposed to the pace it will take to reach the peak of the current cycle, while she also highlighted the increased level of difficulty that will become evident during the upcoming stage of tightening.
• A reversal of the early bid in Chinese equities may have helped limit Tsy losses in Asia.
• Communique surrounding the impending Biden-Xi meeting will now be eyed ahead of NY hours. Further out, Monday will see Fedspeak from Brainard and Williams, with the latter’s comments set to cross in the NY-Asia crossover.