Light Bid Seen In Asia

TYM2 stuck to a relatively narrow 0-07 range in Asia-Pac hours, with Tsys ultimately drawing support from Snapchat guidance-inspired weakness in e-minis (with the NASDAQ 100 contract down ~1.5% at typing), worry re: Chinese growth and Hong Kong’s leadership playing down the prospect of an imminent unwind of COVID-related border restrictions. Elsewhere, U.S. President Biden flagged no changed in U.S. policy re: Taiwan after his Monday comms mishap, while the Taiwanese press noted that the two countries will speak about U.S. arms sale policy during an upcoming round of “Monterey Talks” in Washington D.C. The latter points had little ultimate impact on markets.

• TYM2 last trades +0-04+ at 119-23, 0-02 off best levels, on volume of ~120K. Cash Tsys run 0.5-1.5bp richer across the curve, with 7s outperforming.
• Fedspeak from George (’22 voter) & Daly (’24 voter) failed to shift the narrative, with the former flagging a need to monitor market reaction during the early days of the Fed’s QT scheme, while the later noted that she didn’t foresee a recession in the wake of Fed tightening.
• Looking ahead, NY hours will bring the release of the latest batch of flash PMIs, new home sales data and the latest Richmond Fed m’fing survey. We will also get Fedspeak from Chair Powell & 2-Year Tsy supply.