Firmer, Yields through Yesterday’s Lows

Tsys have richened further through the Asia/London handover, building on Asia-Pac reaction to Monday’s headline flow, with block buys across the FV, TY & UXY contracts providing support in Asia-Pac hours. There was some two-way price action around the latest batch of UK labour market data before a bid came back in.

• That leaves cash Tsys running 2.5-3.5bp richer across the curve, with all of the benchmark Tsy yields printing through yesterday’s lows.
• TYU3 trades 0-01 off the peak of its 0-10+ range, last +0-09, on healthy volume of ~156K, hovering just below the 6 July peak (111-15) , which offers initial technical resistance.
• An FT interview New York Fed President Williams was published ahead of the London handover. The piece saw Williams note that “I don’t have a recession in my forecast. I have pretty slow growth.” Elsewhere, Williams flagged that “shelter inflation continues to move towards levels that are consistent with 2% overall inflation and also see that occurring in core services ex-housing.”
• NFIB small business optimism, Fedspeak and 3-Year Tsy supply provide the highlights of today’s NY docket.