Market Roundup: Risk Appetite Improves

US rates have see-sawed to lower levels in late morning trade, modest risk-on tone early on gaining momentum in late morning trade as stocks held decent gains (SPX emini EDU2 +90.0 at 3889.75).

• Tsys opened with a modest risk-on tone on firmer stocks, pared losses/traded steady to mildly higher after U-Mich 5-10Y inflation exp revised lower to 3.1%, home sales strong +10.7% to 696k - much better than estimated 590k.
  
• Short end Eurodollar futures spiked just prior to U-Mich data: EDU2 gapped +0.095 to 96.785 a minute before the data release before tapping 96.79 briefly after some two-way flow. Currently +0.055 at 96.745, the move occurred well before a Dec block buy of 8k at 96.31 at 1012ET.
• Meanwhile, Fed monetary tightening will slow the economy but is unlikely to push it into recession because household wealth is high and business activity is strong, St. Louis Fed President James Bullard said Friday.
• "I think it's a little early to have this debate about recession probabilities in the U.S.," Bullard told an event sponsored by UBS. "We'll slow down to a trend pace of growth as opposed to below trend."
• Bonds extended lows by midmorning, yield curves bear steepening w/ short end rates outperforming.