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Hit Lower On Latest Evergrande Headlines

US TSYS

The initial scepticism surrounding Evergrande & the return of Chinese markets after their elongated weekend has been replaced by risk positive flows in the wake of news that points towards Evergrande making a partial, renegotiated coupon payment tomorrow (when the coupon is due). T-Notes saw a quick about turn on the news, trading lower, although the contract has recovered from worst levels to trade -0-03 at 133-03 at typing, with volume comfortably above average, nearing 100K. Cash Tsys sit 0.5-1.5bp cheaper across the curve, with 7s leading the sell off. Early Asia-Pac flow centred on the short end, with the previously outlined activity in Eurodollar fly strategies observed, while the most recent Evergrande headlines triggered selling of Eurodollars and steepener flow in several spreads.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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