A Touch Firmer Overnight On Broader Inputs

A bid in JGBs and a block buy in TY futures (+1,896) supported Tsys overnight, although some cheapening in ACGBs and a pullback from best levels in the JGB space probably capped the bid.

• That leaves cash Tsys ~1-2bp richer across the major benchmarks, with intermediates outperforming at the margin after lagging during Wednesday’s relatively modest (at least based on net daily change) rally. TYH3 is +0-06 at 113-24, 0-00+ off the peak of its 0-05 range, on volume of ~64K.
• There was a lack of meaningful macro headline flow overnight, outside of U.S. President Biden pledging to back Ukraine for “as long as it takes” re: the conflict with Russia. This left the aforementioned cross-market direction and block flow at the fore. We also believe that U.S. Tsys may have benefitted from spread based demand vs. ACGBs (as we have covered elsewhere).
• Looking ahead, weekly jobless claims data, revised Q3 GDP readings and the Kansas City Fed m’fing index are due in NY hours. We will also get 5-Year TIPS supply.