Block Flow In Tsys Headlines After Thursday's Tsy Swings

The U.S. Tsy space was much calmer than what was witnessed during Thursday's NY session. T-Notes registered an incremental fresh session low as Chinese equity indices pared their initial post-Chinese data dip (Chinese data was predictably strong in Y/Y terms, although a little more mixed vs. exp.), which came after a pullback from best levels in late NY hours. Some pockets of TYM1 buying then showed their hand helping the contract off lows, before a tick back to worst levels. TY -0-09 at 132-12 at typing, 0-01+ off lows, holding to a 0-05+ range overnight, with cash Tsys unchanged to 0.5 bp cheaper across the curve. Block flow was headlined by 20K of FVM1 124.25 call selling and what looked like 15K of FVM1 123.75 call selling (this may have represented a seller of the relevant 3x4 call strip). Elsewhere, there was what seemed to be a 2,275 block sale of UXYM1.

• JGB futures moved away from their overnight levels during the Tokyo session, in sympathy with the late NY pullback in U.S. Tsys, with the contract last 2 ticks above yesterday's settlement levels. Cash JGBs have seen some light twist steepening as a result, with marginal cheapening of 30s and 40s on the day. There has been little in the way of notable domestic news flow, with BoJ Governor Kuroda failing to offer anything new in his latest parliamentary address.
• It was a very narrow Sydney session for Aussie bond futures, with no follow through impact from the slew of Chinese economic data, while the AOFM weekly issuance schedule was the definition of vanilla (as expected). YM +0.5, XM +4.0 at typing.