Curve A Touch Steeper, Back From China CPI-Inspired Bests

TYZ3 made a brief foray above Wednesday highs in Asia-Pac hours, aided by slightly softer than expected Chinese CPI data.

• Block sales in TY (-1,640) & UXY (-2,375 total over 2 clips) then helped the space away from post-data bests.
• TYZ3 now sits +0-01 at 108-11+, 0-01 off the base of a 0-06+ range.
• Cash Tsy yields sit little changed to 2.5bp higher on the day, with the curve steepening a little.
• 10s trade back above multi-week double support in yield terms, just, while 30-Year yields hold below their own multi-week double bottom support, despite moving away from yesterday’s extremes.
• Looking ahead, weekly jobless claims data headlines the limited NY economic data docket, with 30-Year Tsy supply also due. Still, participants will pay more attention to the latest barrage of Fedspeak, which is headlined by Chair Powell.
• FOMC-dated OIS currently shows ~4.5bp of tightening through January ’24. Further out the first full 25bp cut is priced come the end of the June ’24 FOMC.