Futures Marginally Lower At Re-open

TYM2 nudges lower at the re-open, dealing -0-04+ at 119-11+.

• To recap, Wednesday’s Asia-Pac pullback from session cheaps extended through the day, leaving the major benchmark Tsys 2-13bp richer come the bell, as the curve bull flattened. The shorter end remained capped by Fed hike premium, with a cumulative 140bp of hikes baked into dated OIS covering the next 3 FOMC meetings (50bp hikes priced for both the May & June gatherings).
• The latest BoJ pledge re: YCC enforcement helped the space to firm in late Tokyo/early European dealing after PBoC inaction and resultant weakness in the Chinese equity space provided support overnight.
• The rally didn’t deter bidders when it came to 20-Year supply, which stopped through WI by 3bp, while the cover ratio moved further above its recent averages and dealer takedown cratered to the lowest level observed at a 20-Year auction. The auction gave the bid fresh legs, helping to underpin Tsys in late NY dealing.
• Flow was dominated by block buys in TU (2x +10K) & a block selling program in TY (total of -25K lots).
• New Zealand CPI data headlines a relatively limited Asia-Pac docket. Looking ahead, Thursday will see the latest Philly Fed business survey and weekly jobless claims data cross, with Fedspeak from Powell & 5-Year TIPS supply also due.