Fairly Flat Overnight

Broader macro headline flow was light during Asia-Pac hours, allowing T-Notes to settle into a 0-02+ range, last -0-03 at 132-02+, while cash Tsys trade little changed to 1.0bp cheaper across the curve. Some questions have done the rounds re: the prospect of bipartisan passage of the proposed infrastructure deal, although key Democratic Senator Manchin deemed the use of reconciliation procedures to force the package through as "inevitable" on Thursday.

• As a reminder, Tsy trade was particularly muted on Thursday, with a lack of meaningful news and market flow evident. The cash Tsy curve twist flattened, with the benchmarks out to 10 years cheapening by ~1.0bp, while longer dated paper richened by a similar amount. A solid round of 7-Year Tsy supply and a block buy of FVU1 (+9,000) lifted the space on a couple of separate occasions during NY trade, with some modest cheapening back towards the European lows into the close. In terms of auction specifics the latest round of 7-Year supply stopped through WI by 0.3bp with the cover ratio little changed vs. the prev. auction, hovering a touch above the recent average, while dealer takedown slid further below the recent average. Fedspeak saw a broad affirmation of known, existing views from the raft of speakers. Ex-NY Fed President Dudley stressed that markets shouldn't pay too much attention to any one regional Fed President, as he outlined his view, suggesting that the Fed will be "pretty patient here."
• Friday's U.S. docket will be headlined by May's PCE data and 4 Fed speakers.