Macau Loosening COVID Restrictions Results In Light Cheapening

The previously flagged screen flow in TY futures helps the contract to a fresh session low of 109-14. Initial support in TYZ2 lies at Friday’s low (109-10+). Cash Tsys run 1.5-3.0bp cheaper across the curve, with intermediates leading the move.

• The downtick in the space seems to have been facilitated by news that Macau is to ease entrance rules for foreigners from Nov. 13.
• Some participants may be leaning on the idea that this points towards an eventual loosening of ZCS restrictions in mainland China, given recent speculation surrounding that matter.
• BBG flags some caveats around the Macau headlines that a little more restrictive than the initial headline, noting “Macau says it will allow foreigners who meet specific conditions to enter the city through Hong Kong, Taiwan, or other countries or regions other than China without prior approvals, according to a government statement. Special conditions include having a work or student visa or residence permit.”