Looking To The Weakness In Tech

T-Notes registered fresh session highs during the Asia/Europe crossover, last +0-05+ at 138-18+, with yields across the cash curve unchanged to 1.7bp richer, as the curve bull flattens. Little to note on the headline front in Asia-Pac hours, with the space drawing support from the dip in e-minis, which came on the back of big tech earnings (the NASDAQ contract broke through Thursday lows, which seemed to be the driving force behind the latest leg), allowing Tsys to move away from their respective Thursday lows. Eurodollar futures sit unchanged to +1.0 through the reds, with a ~20K sale of EDU1 triggering a brief burst activity across the front end of the strip during Asia-Pac hours.

• To recap, the space was under pressure on Thursday, as the bear steepening witnessed in Asia-Pac hours extended, aided by the firming of chances of a Biden election victory/Blue Wave in some quarters (although betting market pricing remains more hesitant than the likes of FiveThirtyEight's election model re: the pricing of a Blue Wave), with reports suggesting the COVID-19 situation was providing headwinds for the incumbent President in several of the battleground states. 10s and 20s provided the weak points on the curve, with both closing almost 5.0bp cheaper. Firmer than expected Q3 U.S. GDP data and more favourable than expected weekly jobless claims also helped to pressure the space. The record sized 7-Year Note also fed into the dynamic later in the day, tailing by over 1.0bp, with the cover ratio easing to sub average levels and dealer takedown ticking up, coming in above the recent averages. On the flow side, a WNZ0 block sale was seen during the NY morning.
• The MNI Chicago PMI print and PCE data headline locally on Friday.