Curve Recovers From Flats On Thursday, Familiar Risks Eyed

T-Notes last unchanged at 139-04, with the contract holding a 0-02 range.

• The familiar sources of risk that we flagged early in Asia-Pac hours on Thursday have dominated news flow during the last 24 hours (namely the fiscal impasse in DC, COVID worry, most notably in Europe, the ongoing Brexit saga and to a degree, Sino-U.S. tensions). Initial jobless claims data went in the wrong direction, at least in terms of the health of the economy, while regional activity indicators were mixed. The overarching risk negative factors supported the space in early dealing, before the bid faded and yields across the cash Tsy curve finished unchanged to 1.0bp cheaper, with the retrace coming in line with a recovery in equities.
• Asia-Pac trade has seen a contact flag some early interest in the 1x2 TYZ0 137.00/135.00 put spread with 4.0K of the strategy trading at 0-06. The contact suggested the strategy was lifted.
• There is little in the way of true tier 1 risk slated for the Asia-Pac calendar on Friday.