Light Bid Seen, China COVID Matters Eyed

The previously covered COVID-related unrest witnessed across pockets of the major Chinese cities has provided a light bid for Tsy futures during early Asia-Pac dealing, although the major contracts operate off their early session peaks after initially extending on their late Friday richening.

• A reminder that Friday Tsy trade was largely driven by swings in crude prices, with holiday-shortened, liquidity-thinned conditions evident. Cash Tsys finished the final session of last week 3.0bp richer to 0.5bp cheaper, with light twist steepening apparent.
• COVID matters in China will headline in Asia-Pac hours. Further out, headline flow surrounding the ongoing EU negotiations re: the proposed Russian oil price cap will generate attention, while the NY docket is headlined by the Dallas Fed m’fing activity index and Fedspeak from NY Fed President Williams & St. Louis Fed President Bullard.