Firmer As Crude Tumbles

Lower crude oil prices (WTI & Brent are down the best part of $4 apiece at typing) and a downtick in e-mini futures (S&P 500 contract -0.9% at typing) provided support for the Tsy space in Asia dealing, as participants looked ahead to day 1 of Fed Chair Powell’s testimony on the Hill. That leaves TYU2 +0-10 at 116-03+ at typing, 0-02+ off the peak of its Asia session range, while cash Tsys run 0.5-2.0bp richer across the curve, with the belly leading.

• There wasn’t much in the way of meaningful macro headline flow to digest, outside of various news outlets pointing to U.S. President Biden formally declaring a short-term gasoline tax holiday later on Wednesday.
• A 5.0K block trade in the TYN2 119.25/118.00 put spread headlined on the flow side. The direction of the trade wasn’t immediately clear, but owing to the open interest, recent market moves and perceived cash flow surrounding such a position, some pointed to a seller of the put spread.
• Looking ahead, Fedspeak dominates Wednesday’s NY docket, with Chair Powell’s aforementioned appearance in DC headlining. Elsewhere, Evans, Harker & Barkin are all due to speak. 20-Year Tsy supply will also take place, with only second tier local data evident, in the form of the weekly MBA mortgage applications print.