Coiling Overnight

Commentary from Boston Fed President Rosengren failed to add much in the way of tangible new information during Asia-Pac hours, with T-Notes sticking to the confines of a 0-03+ range, last +0-00+ at 132-18. Regional participants were happy to sell cash Tsys at the re-open (in what was the first round of cash trade during Asia-Pac hours for the week), with the longer end of the curve running ~1.5bp cheaper at typing, albeit back from softest levels of the day. Activity was headlined by a 20K screen lift of the TYM1 130.00 puts.

• As a reminder, the space rallied during NY hours on Wednesday, after a leg lower around the release of the Tsy's quarterly refunding announcement, although there was no movement in coupon supply outlined by the Tsy (the TBAC "anticipates that Treasury may want to reduce nominal coupon sizes beginning late this year or early next year"). Headline data was on the softer side of exp. A raft of Fedspeak hit, headlined by Vice Chair Clarida, who reiterated the notion that the Fed is "a long way from our goals, and in our new framework, we want to see actual progress and not just forecast progress." T-Notes finished just shy of best levels, with that contract sticking within the range witnessed on Tuesday. 7s outperformed on the curve, richening by 3.0bp on the day, while 5-Year breakevens printed another fresh multi-year high. On the flow side, the cheapening surrounding the quarterly refunding announcement saw real-money a/c's buying the belly, while fast money looked to fade the cheapening of 20s on the 10-/20-/30-Year fly, per several desks.
• Fedspeak from Williams, Kaplan & Mester will hit on Thursday, as will the latest Financial Stability Report from the Fed. We will also see the release of weekly jobless claims data, challenger job cuts and the Q1 labour cost readings.