A Narrow Asia Session With A Lack Of Fiscal Movement

A (familiar) tight Asia-Pac session for T-Notes, sticking to a 0-02+ range last -0-01+ at 132-13. The cash Tsy curve has seen some modest twist flattening, with 30s richening by 1.0bp. U.S. fiscal matters (and the lack of movement there) continue to garner the most attention in terms of discussions, while the U.S. Senate passed bipartisan legislation aimed at countering China's swelling global influence through investing more than $200bn in American tech & research, as expected. 905 lots of WNU1 were lifted on block, which headlined on the flow side.

• As a reminder, the broader Tsy space firmed on Tuesday, with benchmark yields across the curve richening by 0.5-3.5bp come the bell as 10s outperformed. A peculiar, relatively widespread global website outage was the catalyst behind an early NY bid for the space, while equities struggled early on, before recovering. Tsys failed to challenge their early NY extremes, but didn't get anywhere near reversing gains. The more notable rounds of flow were also supportive for the broader Tsy space, with an apparent liquidation of an existing FV/WN steepener seen (-19K vs. +2,950), while short TY vol. structure plays and talk of broader short covering in the Tsy space were also observed. Elsewhere, the latest 3-Year Tsy auction stopped through WI by 0.1bp, with dealer takedown sliding to the lowest level witnessed in over 1 year as the cover ratio nudged above its recent average. For STIRs, downside plays in EDZ3 were witnessed (via the 2EZ1 99.125/99.00/98.875 put fly). A 40K screen seller of the EDU2/Z2 spread was also seen during NY hours.
• 10-Year Tsy supply dominates the domestic U.S. docket on Wednesday.