Another Leg Flatter

A downtick in e-minis (with the S&P 500 contract breaching Wednesday's low) and the bid in the Aussie bond space provided support for U.S. Tsys in Asia-Pac hours, with T-Notes last +0-02 at 139-09, while cash Tsys sit unchanged to 1.7bp richer across the curve, with bull flattening evident as the space operates just shy of richest levels of the session. Diminished prospects of pre-election U.S. fiscal stimulus, COVID worry in Europe and Sino-U.S. tensions were familiar themes driving the major macro headline flow.

• This comes after a fairly subdued Wednesday, as TY volumes sagged. The early goings set the tone for the day, with Tsy Secretary Mnuchin watering down any lingering expectations of a pre-election fiscal pact in DC, while late NY trade saw European COVID worry move to the fore. This allowed cash Tsys to finish unchanged to ~2.0bp richer, although the space edged off richest levels as we moved through NY trade. Fedspeak and data failed to move the needle, with the aforementioned matters dominating.
• Weekly jobless claims data, regional activity surveys from New York & Philadelphia and a slew of Fedspeak headline locally on Thursday.