Yields Firm In Early Asia Trade, Fed Ends BTFP Loans

TYH4 is trading at 110-28, - 03 from NY closing levels.

• As Asia opens the cash yields are roughly 1-1.5bps higher across benchmarks.
• Cash Tsys traded near late session lows after the bell, with yields higher by about 5bps across the curve.
• The Federal Reserve Board Wednesday announced that its Bank Term Funding Program will cease making new loans as scheduled on March 11, and adjusted the program's interest rate higher for loans made before the deadline. (MNI Policy Team, see this link for more details).
• Treasury futures, had recovered from Tuesdays modest sell off to trade back to 111-16, however pared gains after larger than expected gains for S&P Global US PMIs for January: Mfg PMI (50.3 vs. 47.6 est, 47.9 prior); Services PMI (52.9 vs. 51.5 est, 51.4 prior); Composite PMI (52.3 vs. 51.0 est, 50.9 prior).
• Tsys gapped lower/tested lows (5Y yield climbed to 4.0885%) after $61B 5Y note auction (91282CJW2) tailed: 4.055% high yield vs. 4.035% WI; 2.31x bid-to-cover vs. 2.50x in the prior month.
• Later tonight in the US: GDP, PCE, Weekly Claims and Treasury Sec Yellen Outlook