Modest Cheapening In Asia, Tight Ranges In Play Alongside Low Volume

Cash Tsys are marginally cheaper on the day as we work towards the end of the Asia-Pac session, running 0.5-2.0bp cheaper across the cash curve, with the belly leading the weakness at the margin. TYM3 is -0-05 at 114-12, on light volume of ~51K, printing just above the base of its contained 0-06+ Asia-Pac range.

• Wednesday’s (relatively limited) weakness in the front end of the Tsy & UK Gilt curves, as well as the wider pressure seen on the German curve and general bid for broader equities (the major Asia-Pac benchmark indices are mixed) since Wednesday’s Asia-Pac close were the likely sources of underlying pressure for the space, while a leg of cheapening in JGBs (which moderated from extremes) will have done the move no harm.
• There wasn’t anything in the way of tier 1 event risk slated during Asia-Pac hours and we didn’t get any meaningful macro news flow.
• Looking ahead, inflation data from Germany (state & national) and Spain will provide some interesting reference points in European hours. Further out, weekly jobless claims data and final Q4 GDP & PCE prints provide the highlights of a limited NY data docket, while Fedspeak will come from Kashkari, Collins & Barkin.