Limited Asia Trade

Participants are understandably unwilling to take on risk ahead of Thursday’s U.S. data releases and the Christmas break, with limited headline flow also noted, resulting in limited ranges and volume when it came to Tsy trade in Asia. TYH2 last -0-01 at 130-22+, operating in a 0-03+ range on ~31K lots, while cash Tsys are ~0.5-0.1bp cheaper across the curve.

• To recap, T-Notes edged away from worst levels during Wednesday’s NY afternoon, as Tsys regained some poise during a very limited (tight range, low volume) session. Cash Tsys were flat to 1.5bp richer across the curve come the bell, flattening at the margin. A reminder that Wednesday represented the final full trading day ahead of Christmas (shortened cash & futures sessions are in place on Thursday, while both markets are closed on Friday). Stronger than expected final Q3 GDP & consumer confidence data failed to impact the space. Equities benefitted from studies pointing to lower hospitalisation risks when it comes to the omicron COVID strain (when compared to the delta mutation), while the FDA granted emergency authorisation for Pfizer’s COVID pill, which is set to “revolutionise” treatment when it comes to the virus. The modest headline-driven cheapening witnessed in Tsys was quickly reversed.
• U.S. hours will see the release of the PCE suite, durable goods data, weekly jobless claims, existing home sales and final UoM sentiment readings.