Marginally Cheaper In Asia

TYU2 deals -0-04 at 117-17, a touch above the midpoint of its 0-11 overnight range, on sub-standard volume of ~79K. Cash Tsys run 0.5-1.5bp cheaper across the curve, bear flattening.

• Cash Tsys blipped lower in overnight dealing before recovering some poise. Most of the Asia-Pac movement & volume in TYU2 came as wider core FI markets came under some light pressure, with gyrations in USD/JPY and a rally in regional equity benchmarks flagged as potential triggers, without any overt headline catalysts evident. Note that the Tsy space is still operating comfortably off of last week’s cycle cheaps.
• Outside of this, participants were left to digest yesterday’s soft PMI data out of Europe & the U.S., as well as the resultant richening in the wider core global FI space. A quick reminder that Tsys finished off of best levels on Thursday, with block sales in the futures space and hawkish Fedspeak from Governor Bowman (backing a 75bp hike in July, followed by some 50bp move) at the fore after the EGB cash close.
• Looking ahead, Friday’s NY session will bring the release of new home sales data, the final UoM sentiment reading for June and Fedspeak from Bullard (’22 voter) & Daly (’24 voter).