Firmer Into London

Tsys have firmed a touch into London hours, with comments from the Chinese Defence Minister crossing the wires after a meeting with his U.S. counterpart. The Minister has stressed that no outside force has the right to interfere with Taiwan, while noting that the Chinese military has the ability to maintain unification. Similar things have been said before, with markets perhaps a bit jittery after the meeting.

• TYZ2 is +0-06 at 112-16, 0-01 off its fresh session high, operating in a 0-10+ range on volume of 147K (boosted by roll activity). Cash Tsys are 2.0-4.5bp richer, with the belly of the curve leading.
• A light bid was apparent in earlier rounds of Asia-Pac trade. There was little in the way of overt catalysts noted as cross-market flows aided the bid, with the broad USD ticking lower in FX trade.
• A block buy of FV futures (+2,030) and quarterly roll activity headlined on the flow side.
• Markets looked through the latest Chinese COVID case update, with the country recording another 2 COVID-linked deaths after recording 3 over the weekend (the first such deaths observed in nearly 6 months, albeit within the elderly community, with 2 of the initial 3 instances also exhibiting complex medical conditional pre-COVID).
• NY hours will see the release of the Richmond Fed m’fing survey, 7-Year Tsy & 2-Year FRN supply, as well as Fedspeak from Bullard, George & Mester.