Flat Start After Twist Flattening On Thursday

TYM3 deals around late NY levels, -0-02 at 114-16+.

• Cash Tsys twist flattened on Thursday, with the major benchmarks running 2bp cheaper to 2.5bp richer, with a pivot at the 7-Year point. European inflation data (out of Germany & Spain) provided some two-way impetus before the NY session got into full swing.
• Equities easing back from best levels then provided some support to Tsys, before a kick higher in stocks into the bell then applied fresh pressure. A late block sale in WN futures also weighed.
• The latest weekly Fed H.4.1 reading has revealed a small downtick in the size of the Fed’s balance sheet (after the recent, well-documented uptick surrounding the banking sector tumult). This consisted of a downtick in FIMA usage and lower usage of the discount window facility, while there was an uptick in BTFP usage and little net movement in FHLB lending.
• Elsewhere, various trackers revealed a slowing of inflows into money market funds from the elevated levels witnessed in the two weeks prior.
• Also note that the NY-Asia-Pac handover has seen the New York Times report that “a Manhattan grand jury voted to indict Donald J. Trump on Thursday for his role in paying hush money to a porn star, according to five people with knowledge of the matter.”
• Official PMI data out of China presents the headline risk event during the Asia-Pac session, with Eurozone CPI & U.S. PCE data set to provide the focal points as Friday wears on. Elsewhere, we will get the latest MNI Chicago PMI print and final UoM sentiment data, in addition to Fedspeak from Waller, Williams & Cook.