Futures Look To EGBs With Cash Closed Until NY Hours

TYU3 looks to EGBs for direction, with moves in benchmark European paper limiting any rallies linked to Chinese equities moving to worst levels of the day into the mainland equity close (albeit still finishing comfortably higher at the index level).

• TYU3 is +0-00+ at 109-14+, sitting in the middle of a 0-09 range, with roll activity boosting volume.
• Cash Tsys are closed in London hours (they were open in Asia) as the UK observes a public holiday, they will re-open for NY dealing.
• The Tsy futures curve has twist flattened a touch vs. Friday’s settlement levels.
• Macro headline flow outside of Chinese equity matters has been somewhat limited.
• Terminal policy rate pricing on the FOMC-dated OIS strip shows at 5.49% (come December), with 33bp of cuts then priced through June ’24, building a little on Friday’s hawkish adjustment.
• Dallas Fed manufacturing activity data and comments from Fed’s Barr (although the topic is banking services) headline the NY docket.