Bear Flattening A Little On The Day

Headlines surrounding Germany entering a technical recession on the back of revisions in the country’s final Q1 GDP print provided light support for Tsys at the turn of the hour, with the space consolidating just above session cheaps as Europe settles in.

• TYM3 is -0-08+ at 113-05, 0-02 off the base of its 0-09+ range. Cash Tsys sit little changed to 2.0bp cheaper, with a bear flattening bias seen. Roll activity supports volume in futures.
• FOMC-dated OIS indicates nearly 19bp of cumulative tightening come the end of the July gathering, with ~42bp of cuts priced by year-end.
• A quick reminder that Fitch placed the U.S on credit watch negative late yesterday, owing to “increased political partisanship that is hindering reaching a resolution to raise or suspend the debt limit despite the fast-approaching x date.”
• Weekly jobless claims, pending home sales data, the latest Kansas City Fed manufacturing survey and updated GDP prints present the highlights of Thursday’s NY data docket. Fedspeak from Barkin & Collins is also due, as is 7-Year Tsy supply.