Consolidating In Asia After Head Fake Retrace In 30s

Marginal reversals of Tuesday's moves in e-minis and Tsys have placed modest pressure on the Tsy space in Asia-Pac dealing, although ranges generally remain tight. T-Notes last -0-00+ at 139-06, with the contract holding a 0-02+ range & cash Tsy yields little changed across the curve.

• The continued fiscal impasse on the Hill, delays surrounding the COVID-19 vaccine process (as both J&J & Eli Lily experienced worry re: test subjects) and some idiosyncratic pressure points for equities provided support for the U.S. Tsy space on Tuesday. Elsewhere, U.S. CPI slowed, as expected. The sum of those parts saw the curve bull flatten, with 30-Year yields retracing back into familiar territory and below the 200-DMA (see earlier bullet for more on that matter), with that particular metric richening by ~6bp on the day.
• Eurodollar futures sit +/- 0.5 through the reds. The first round of BoJ US$ ops covering year-end received 0 bids, adding credence to calls for a sanguine year-end in US$ funding markets.
• Fed's Daly and an address from Chinese President Xi failed to add to broader discussions in Asia-Pac hours. Local focus on Wednesday will fall on a deluge of Fedspeak and the latest U.S. PPI reading.