A Touch Steeper & Cheaper Early On, Powell Eyed

Tsys consolidate some-to--most of their light late Thursday uptick, which was seemingly aided by month-end extension like activity, although the space still finished comfortably cheaper come yesterday’s close.

• Although fire between Israel and Hamas has been seen, it hasn’t provided much of a risk-off impact for markets.
• Cash Tsy yields are 0.5-2.0bp higher on the day, with a light steepening impulse seen.
• TYH4 sits comfortably within yesterday’s boundaries, last +0-02+ at 109-28, just off the base of its 0-07+ range.
• European m’fing PMI data will filter out over the next ~30 minutes, although most of the readings are final.
• The ISM manufacturing survey, final S&P Global PMI print and comments from Fed Chair Powell will hit in NY hours (with supplementary Fedspeak also due).
• A quick reminder that the Fed goes into pre-meeting blackout at the end of today. Participants eye Powell’s fireside chat (11:00 NY/16:00 London) as the last meaningful (scheduled) opportunity for a pre-meeting pushback against the recent round of dovish repricing/easing of financial conditions (if it is to come).
• FOMC-dated OIS essentially prices 50/50 odds of a cut come the end of the March ’24 FOMC, with such a move fully discounted come the end of the May gathering.