Firmer In Asia, Although Chinese Equity Bounce Caps Rally

Cash Tsys added to Monday’s late bounce from NY lows during Asia-Pac trade, with a move lower in the broader USD and then spill over from the ACGB space in the wake of the latest RBA decision helping the bid.

• The space has moved away from highs in recent dealing as Hong Kong & Chinese added to their already notable morning gains. Some have pointed to the verified and unverified re-opening headlines/whispers out of China that we have flagged in previous bullets as a driving factor for the bid in those equity indices.
• That leaves cash Tsys running 1.5-3.0bp richer across the curve, bull steepening. Meanwhile, TYZ2 deals +0-09 at 110-28, 0-03+ off the peak of its 0-11+ session range as volume in the contract nears 100K.
• The major flow in the space happened in the first half of Asia-Pac dealing, consisting of a 1.6K block sale of TY futures and a 5K screen lift of TYZ2 112.75 calls.
• NY hours will see the release of the ISM manufacturing survey and JOLTs job opening data, although participants are of course more focused on Wednesday’s FOMC decision.