Away From Post-FOMC Cheaps

T-Notes edged higher in Asia-Pac hours, but still operated in the bottom half of Wednesday's range, last +0-01 at 139-15+, with yields running 0.4-2.9bp richer in cash trade, as the curve bull flattened. Regional Asia-Pac traders looked to fade the post-FOMC weakness in the cash space from the re-open, aided by the latest round of commentary from U.S. President Trump, which ultimately drew questions re: the prospects for the TikTok-Oracle deal, which resulted in pressure on e-minis.

• Tsys faded to cheapest levels of the day in the wake of the latest FOMC decision, which saw the Fed move its new strategic framework/outcome based forward guidance into its statement, but perhaps disappointed on the lack of firmer guidance surrounding asset purchases and no extension to the maturity of the Fed's Tsy purchases in particular (which some were looking for). This left the curve a touch steeper come the bell, with the move wider in breakevens pulling back from extremes. Median Fed projections see rates on hold through 2023, with Kashkari looking for more dovish forward guidance and Kaplan looking for more optionality. Earlier in the day, real money buyers stepped in after the release of weaker than expected retail sales data.
• Overnight flow saw some light downside interest via an 1875 lot block buy of the TYZ0 137.00 puts.
• Eurodollar futures sit unchanged to +0.5 through the reds.
• Focus today moves to weekly claims and the latest Philly Fed survey. Elsewhere, we will see 10-Year TIPS supply and the Tsy announcement re: next week's 2-, 5- & 7-Note supply (as well as 2-Year FRNs).