Core FI Off Best Levels In Asia

T-Notes have drifted marginally lower as we grind towards European hours, -0-02+ at 131-11, holding to a 0-05+ range during overnight trade, with under 40K lots trading thus far. The Easter period and associated holidays are clearly sapping liquidity, while there has been nothing in the way of notable headline flow apparent. Cash Tsys are closed until NY hours (which are themselves shortened). A reminder that the Tsy complex experienced a firm start to the month of April as the curve bull flattened on Thursday, with the longer end richening by ~8.0bp vs. Wednesday's closing levels. This came alongside/despite strong local data, which, when combined with the lower yield environment, allowed the equity space to firm. The S&P 500 index (and ES futures) traded and closed above 4,000 for the first time. The latest ISM m'fing survey revealed the fastest headline rate of expansion seen since the early 80s, but didn't create anything in the way of lasting selling pressure for Tsys as it came on the heels of a strong round of regional PMI prints. Elsewhere, block flow in FVM1 futures dominated with just under 32K lots trading via block throughout the NY session, a mixture of buying and selling observed (~13.4K bought vs. 18.5K sold). The NFP release headlines on Friday, with thinner liquidity having the potential to amplify any post-data swings in the space. The release will be followed an address from President Biden (which is seemingly linked to the jobs report), with the President set to speak from 11:00 Eastern time (16:00 London). Widespread market holidays and a lack of tier 1 data may limit activity ahead of NY hours.

• The cash JGB space firmed a little during the Tokyo morning, drawing support from Thursday's bid in U.S. Tsys and the overnight move in JGB futures. The space has retraced from best levels during the afternoon, alongside Tsys. Futures last printing 8 ticks above Tokyo settlement levels.