Flat Start After Light Twist Flattening On Wednesday

TYM3 operates around late NY levels, -0-00+ at 114-16+.

• Cash Tsys saw some light twist flattening on Wednesday, with the rally in global equities (centred on tech owing to Alibaba’s corporate restructuring plan and Micron’s quarterly earnings guidance) and lack of meaningful, negative news surrounding the banking sphere at the fore.
• The major cash Tsy benchmarks were 2bp cheaper to 1bp richer come the close, pivoting around 10s, operating in contained ranges on subdued volume.
• Fed Chair Powell pointed to the SEP when discussing the outlook for monetary policy in a meeting with the Republican Study Committee.
• 7-Year Tsy supply generated a 1.1bp tail, with the cover ratio ticking below the recent average as dealer takedown nudged above its own recent average. Follow through in wider Tsys was limited post-auction.
• Late BBG source reports suggesting that “the FDIC, facing almost $23 billion in costs from recent bank failures, is considering steering a larger-than-usual portion of that burden to the nation’s biggest banks,” did little for the space.
• We don’t have much in the way of tier 1 event risk slated for Asia-Pac hours, while inflation data from Germany (state & national) and Spain will provide some interesting reference points in European hours. Further out, weekly jobless claims data and final Q4 GDP & PCE prints provide the highlights of a limited NY data docket, while Fedspeak will come from Kashkari, Collins & Barkin.