Flat Start For TY, Risk Events From Across The Globe Apparent Into The Weekend

TYM3 opens around late NY levels, after finishing just shy of the intraday peak, +0-02 at 114-23

• The curve bull steepened on Thursday, with the major benchmarks running 4.5-10.0bp richer come the close.
• The move was largely driven by softer than expected tier two data, which included the Philly Fed M’fing survey (internals were mixed, with the prices paid metrics particularly soft), weekly jobless claims, leading index and existing home sales. Lower crude oil prices also fed in.
• While there was little movement in May FOMC-dated OIS a deeper degree of cuts were priced in by the end of ’23.
• Fedspeak from across the hawk-dove spectrum failed to move the needle.
• The weekly update from the Fed saw a modest uptick in both discount window and BTFP usage, while FIMA usage nudged lower. This resulted in a downtick in the overall size of the Fed’s balance sheet.
• Elsewhere, “x-date” discussions continued, with a seeming soft tax take skewing the risk of the date to falling sooner, rather than later. This was accompanied by continued debt ceiling rhetoric and general fiscal musings from both sides of the DC aisle.
• Asia-Pac hours will be headlined by Fedspeak from Philly Fed President Harker & Japanese CPI data. Further out, preliminary PMI data from across the globe will cross, along with UK retail sales. There will also be a range of ECB speakers and comments from Fed Governor Cook (with the Fed going into pre-meeting blackout this weekend).