Flat Start To Final Asia Session Of The Week

TYM2 operates marginally above late NY levels, dealing -0-06+ at 122-23.

• To recap, Tsys finished cheaper on Thursday, albeit off of worst levels, with week-to-date ranges prevailing. Payside activity in swap flows (which got underway in Asia) and a bid in equity markets seemed to be the drivers of the cheapening. The major benchmarks were 4.5-8.5bp cheaper come the bell, with the 7- to 10-Year zone leading the way lower. Caution around the NATO summit may have helped the space off of intraday cheaps as NY participants filed in, but a lack of curve balls there and a fresh leg higher in equites late in the day applied fresh pressure to Tsys into the bell.
• Comments from San Francisco Fed President Daly (’24 voter) provide the highlight during Asia-Pac hours, although it seems unlikely that she will reveal anything in the way of fresh information, given that she has made a few addresses post-FOMC. Looking ahead, pending home sales and final UoM sentiment provide the economic readings of note during NY dealing, with Fedspeak from Waller, Williams & Barkin (’24 voter) due.