Early Buying Seen In Asia, Back From Best Levels

Asia-Pac participants showed some inclination to buy the Fed-inspired dip (after the minutes from the central bank’s December meeting pointed to the potential for swifter than expected rate hikes and a more aggressive, earlier balance sheet reduction). Still, TYH2 has edged away from best levels, last dealing +0-01 at 128-28, with cash Tsys running little changed to ~1bp richer at typing.

• To recap, a late NY block buy in TY futures (+9,229) helped the space form a base in post-FOMC dealing. The Tsy space had been pressured ahead of the release of the minutes, with some pointing to the much firmer than expected ADP employment print having a delayed impact on price action (with pressure building after the second round of the day’s Fed Tsy purchases was completed), while $IG issuance continued at a brisk pace (in line with the seasonal norm), weighing on the space.
• Caixin services & composite PMI data out of China headlines the Asia-Pac docket on Thursday, while the ISM services survey tops the NY docket. Thursday’s Fedspeak will consist of addresses from St. Louis Fed President Bullard (’22 voter) & San Francisco Fed President Daly (’24 voter).