European & UK Paper Help Tsys Lower Pre-NY, Block Steepener Flow Seen

Tsys run 3-4bp cheaper across the curve as we move towards NY trade, with the lead from Europe (in light of a hawkish ECB sources story from the FT) front and centre.

• TYZ3 last shows -0-08+, at the base of its 0-13+ range, with yesterday’s low comfortably breached. Initial technical support comes in at 109-03, Wednesday’s low.
• Firmer-than-expected Chinese monthly economic activity data and a medium-term liquidity injection from the PBoC did little for the space in Asia-Pac hours.
• Chinese stocks struggled given continued property sector credit worries.
• The weakness in European/UK bonds, along with a more constructive start to the session for e-minis/European equities, then helped bias Tsys lower.
• Oil futures are back from highs after registering another round of ’23 bests during Asia hours.
• Pre-NY flow has been dominated by a ~280K FV/US steepener block.
• Preliminary UoM sentiment data (particularly the inflation exp. component) headlines the NY data docket, with Empire M’fing, terms of trade and industrial production readings also set to cross.