US TSYS: Holding Cheaper
Tsys are holding cheaper in the Asian session, little meaningful macro news flow has crossed and ranges are narrow. Cash Tsys sit ~1bp cheaper across the major benchmarks. TYZ3 deals at 110-24, -0-02, a 0-04 range is persisting.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Pressured In Recent Dealing
Tsys have been pressured in recent dealing as pressure in JGB's spilling over into the wider space. Cash tsys sit 2-3bps cheaper across the major benchmarks, the belly is marginally underperforming. TYU3 deals at 111-08, -0-03, a touch off the base of the 0-07 range.
JGBS: Futures Extend Weakness Seen Ahead Of Weekend, Take Out Friday Session Low
JGB futures extend overnight weakness seen ahead of the weekend in early Tokyo trade to 146.74, -64 compared to settlement levels, pushing through the low (146.79) set in the aftermath of the BoJ’s surprising YCC tweak on Friday.
- June industrial production rose 2% from last month versus +2.4% m/m estimate. Retail sales fell 0.4% in June from a month earlier, compared to the median estimate of -0.7%.
- JGBs corrected lower on the back of the BoJ rate decision, slipping to new pullback lows of 146.79. According to MNI’s technicals team, this brings key support at the 146.11 low into view on the continuation contract - last printed back in February. The previous buy-on-dips theme appears to have paused, but any return higher will initially target the May 12 high of 149.21. Clearance of these levels would highlight an important break.
- The cash JGB curve has bear steepened with yields 0.6bp (1-year) to 5.4bp (20-year) higher in early Tokyo trade as the market still grapples with Friday’s surprise decision to tweak YCC. The benchmark 10-year yield is 4.3bp higher at 0.611%. The Bank will offer to purchase 10y JGBs at 1.0%, instead of 0.50%, every business day through fixed-rate purchase operations.
- The swap curve also bear steepens with swap spreads generally wider apart from the 5-7-year zone.
US TSYS: Cheaper Start
Cash tsys have opened dealing ~1bp cheaper across the major benchmarks. Asia-Pac participants have faded Fridays cheapening perhaps using the opportunity to enter fresh shorts/close out long positions. On Sunday Federal Reserve Bank of Minneapolis President Kashkari said the base case for the US economy was a slowing economy but avoidance of a recession. TYU3 deals at 111-12, +0-01, a 0-03+ range has been observed thus far.
- Official PMIs from China headline the Asia-Pac session today, the print crosses in just under 90 minutes.
