A Bounce From Lows On Thursday, STIR Flow Headlines

T-Notes hovering around late NY levels, last -0-01 at 131-30+, after the contract recovered from worst levels of the day on Thursday.

• Cash trade saw the space finish little changed to a touch cheaper on Thursday, with the 7- to 10-Year sector providing the weak point on the curve, cheapening by ~2.5bp on the day. Early NY focus fell on record highs for the S&P 500 and a rally in commodities (namely oil & copper), although those moves were at least partially pared, allowing Tsys to recover from intraday cheaps. On the local data front, firmer than expected personal consumption data was seen, while continuing claims continued to nudge lower. The headline Q1, A GDP reading wasn't quite as strong as expected, while pending home sales missed exp. STIR markets provided the main attractions on the flow side, with interest in the 3EU1 98.00/99.00 risk reversal (buying 98.00 puts and selling 99.00 calls) continuing to swell. Most are equating this to a bet that some form of Fed tapering message becomes apparent at the Fed's annual Jackson Hole Symposium. Elsewhere, a near 20K seller of FFM1 was seen at 99.915, likely representing positioning for an IOER hike from the Fed.
• Flash official PMI data out of China headlines the regional Asia-Pac docket on Friday.