Another Rally To Weigh Up

T-Notes little changed vs. late NY levels at the re-open, with the contract -0-03 at 133-25+ at typing. This comes after the contract finished well shy of its intraday peak on Thursday.

• Benchmark yields across the cash Tsy curve finished 1.0-4.0bp lower on Thursday, with the long end lagging the rally as the 3- to 5-Year zone outperformed. U.S. 10- & 30-Year yields extended on the recent move lower ahead of NY hours before pulling back from extremes, with the former failing to break below its 200-DMA, although the latter registered its second consecutive close below that particular technical barometer.
• Continued focus on positioning, increased worry re: COVID variants (at least in terms of case counts) in various pockets across the globe, pressure for equities and increased speculation surrounding monetary easing in China (with most pointing towards the increased likelihood of a targeted RRR cut in the wake of Wednesday's State Council meeting) all feeding the bid in early trade. Still, a move off lows for equity markets helped the Tsy space away from best levels of the day during NY trade.
• There was no real reaction to the latest round of weekly jobless claims data, which saw an unexpected uptick in initial claims, while continuing claims fell a little more than expected.
• There was some focus on 10-Year call/put skew moving into positive territory for the first time since August 2020.
• Chinese inflation data headlines the broader Asia-Pac docket, with Friday's domestic docket relatively empty (wholesale inventories & sales data provides the only point of any note during NY hours).