Limited Overnight, Block Flow Headlines, ADP Eyed

TYU2 futures coiled in overnight trading, briefing looking higher at the re-open before settling into a 0-09 range, last dealing +0-04 at 118-24+ on ~110K lots. Cash Tsys run 1.5bp cheaper to marginally richer on the curve, twist flattening, with a pivot around 20s.

• An FT source report which suggested that “Saudi Arabia has indicated to western allies that it is prepared to raise oil production should Russia’s output fall substantially under the weight of sanctions,” had no meaningful impact on Tsys, even with WTI futures trading over $3 softer vs. settlement at one point.
• Elsewhere, there wasn’t anything in the way of meaningful macro headline flow to digest.
• A quick reminder that Hong Kong & Chinese markets will be closed on Friday, owing to the observance of national holidays. This, coupled with the lack of macro headline flow and a 4-day weekend in the UK (Starting today), may be limiting the appetite of investors when it comes to taking on fresh risk, especially with NFPs due to be released on Friday.
• Flow of note include slightly misweighted FV/TY block flatteners (-8K/+5K x2 and -4K/+2K) along with a block buyer of FVN2 112.00 puts (+5K) and seller of TYN2 119.00 puts (-2.5K), with those options crossing at the same time (pointing to some form of conditional flattener trade).
• Looking ahead, ADP employment data headlines the NY docket on Thursday, with weekly jobless claims, challenger job cuts, factory orders and final durable goods readings also on tap. Fedspeak will come from NY Fed’s Logan (soon to be Dallas Fed President) and Cleveland Fed President Mester (’22 voter).