Bull Flattening On Wednesday, Dovish Feel To Fed Minutes

TYZ2 is little changed in early Asia-Pac dealing, printing +0-02 at 113-00+. A reminder that Tsy futures will be subjected to curtailed trading hours on Thursday, owing to the observance of the Thanksgiving holiday, with cash Tsys now closed until Friday.

• To recap, Tsys rallied off worst levels on Wednesday, as jobless claims increased and PMIs came in weaker than expected. Tsys took another push higher when the FOMC minutes from the Nov meeting noted "a substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate", only "various" officials had concluded that rates would peak at a somewhat higher rate than previously expected.
• The curve bull flattened on Wednesday, major benchmarks ran 3 to 9 bps richer, allowing 2s10s inversion to register a fresh cycle extreme at -80.7 bps.
• On the day, the S&P500 rose ~0.6%, DXY fell ~1% and the VIX fell to its lowest level since 18 Aug.
• OIS markets show a terminal Fed rate at 5.02%, falling ~6 bps in yesterday's dealing. The pricing for the 14 Dec meeting remains stable with a 50 bps hike fully priced in (dated OIS has 54bp of tightening priced, to be exact).
• There is a thin docket in Asia Pac today, and general liquidity will be hampered by the Thanksgiving holiday period.