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Weaker After EGB Inflation Metrics; Jun'23 Takes Lead Quarterly


Tsys trading modestly weaker - followed EGBs lower in early London trade following higher than forecasted French and Spanish inflation data. Off initial lows, futures at lower half overnight range, 2s10s yield curve mildly steeper (+1.039 at -86.002).

  • Jun'23 futures take lead quarterly: TYM3 currently -5 at 111-14.5, above first support 110-21 (Feb 24 low); TUM3 -1.12 at 101-26.88 (42YY 4.7950 +.0167).
  • STIR: Fed funds implied hike for Mar'23 at 29.8bp, May'23 cumulative 55.2bp to 5.132%, Jun'23 73.7bp to 5.317%, terminal at 5.41 in Oct'23 (Mon highs) as markets unwind rate cut pricing.
  • Pick-up in data after slow start to the week
  • 0830ET: Advance Goods Trade Balance (-$89.7B rev, -$91.0B); Wholesale Inventories MoM (0.1%, 0.2%); Retail MoM (0.5%, 0.1%)
  • 0900ET: House Price Purchase Index QoQ (0.1%, --); FHFA House Price Index MoM (-0.1%, -0.2%); S&P CoreLogic CS 20-City MoM SA (-0.54%, -0.40%); S&P CoreLogic CS 20-City YoY NSA (6.77%, 4.75%)
  • 0945ET: MNI Chicago PMI (44.3, 45.5)
  • 1000ET: Richmond Fed Mfg. Index (-11, -5), Business Cond (-10, --); Conf. Board Consumer Confidence (107.1, 108.5); Dallas Fed Services Activity (-15, --) at 1030ET
  • Fed Speak: Chicago Fed Goolsbee, Ivy Tech Comm College, text, no Q&A 1430ET

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