Cash Tsys run 1-4bp cheaper across the curve, with the belly leading the weakness and the wings lagging the wider move, as Asia fades some of Wednesday’s BoE-driven rally. TYZ2 last prints just off the base of its 0-09+ range, -0-15+ at 112-12, on healthy enough volume of ~100K.
- An early uptick in Chinese equities (which faded as property names struggled) helped apply some pressure lighter in the session.
- For 10s, the triple top resistance zone in yields (just above 4.00%), drawn off the YtD & ‘09/’10 highs, continues to provide the most meaningful technical area of note.
- Yesterday’s move pulled the 5-/30-Year curve away from cycle flats, but it still sits around -25bp.
- Gilt market moves in lieu of the BoE’s first round of emergency purchases will likely set the tone in London hours, with regional and national German CPI also due (note that NRW state CPI has not crossed yet, despite it usually being published at ~05:30 London).
- NY hours see the final Q2 GDP print, weekly jobless claims and another round of Fedspeak, with Messrs Bullard, Mester & Daly all set to appear. Expect them to stick to the hawkish script.