Curves Flattens On Thursday

TYH3 deals at 111-13, -0-01, in line with levels seen late in the NY session.

• Cash Tsys finished flat to 4bp richer across the major benchmarks, as the curve flattened.
• Tsys were briefly pressured on the latest round of data which was mixed. Secondary Q4 GDP and personal consumption readings were weaker than expected. whilst the GDP price index and core PCE readings within the report were firmer (dominating market reaction). Initial and continuing jobless claims showed continued resilience in the labour market
• Headlines surrounding the White House narrowing its choices for Fed Brainard's replacement to names that were deemed not to be at the hawkish end of the spectrum then boosted Tsys from lows.
• Rate locks, as brisk pace of corporate issuance was observed, as well as pre-auction short setting, saw the bid capped.
• There was brief pressure as the latest 7-Year Tsy supply tailed, with soft cover and indirect take up observed. Tsys then found fresh support and marginally extended gains.
• National CPI data from Japan and BOJ Governor-nominee Ueda's appearance before Japan's lower house headline in Asia-Pac. Further out we have a slew of U.S. data including personal income/spending, PCE deflator, UofMich consumer sentiment and new home sales. There a number of Fed speakers scheduled to cross, Fed Gov Waller is the highlight.