Cross-Market Inputs Cancel Out, Tight Ranges In Play Ahead Of NY Hours

The combination of the move away from best levels in EGBS & Gilts post-German ZEW data and slightly firmer oil prices keeps Tsys in tight ranges pre-NY, capping the modest spill over bid derived from Gilts post-UK labour market data.

• TYZ3 holds to a very narrow 0-05 band as a result, last +0-01+, with Monday’s high located just above best levels of the session.
• Cash Tsys run flat to 1.5bp richer, with a modest flattening impulse seen.
• Little in the way of pre-NY movement in FOMC-dated OIS. Terminal pricing of 5.46% come December remains evident on the strip, before 36bp of cuts are priced through June ’24.
• NFIB small business optimism data has crossed, with the familiar early news wire release evident. The index softened a little more than the BBG survey consensus expected, although the deterioration vs. the month prior was relatively small, with the index comfortably below the 100 level.
• 10-Year Tsy supply headlines a limited NY docket, with headline flow surrounding GOP-based impeachment discussions and the risk of a government shutdown also on the radar.