Narrow In Asia, Fiscal Matters Eyed

U.S. Tsys came under modest pressure in post-FOMC Asia-Pac trade, with focus on the continued positive musings around the fiscal situation in DC evident, although there was little in the way of solid progress on that front. T-Notes stuck to a 0-05 range, with the contract last -0-01 at 137-27+, while the cash curve is back from session steeps, as Tsys sit unchanged to 0.8bp cheaper across the curve. 2x 10K downside TY block structures drove matters on the flow side in Asia.

• To recap, the final FOMC decision of 2020 was ultimately in line with expectations, with new asset purchase guidance but no change to the asset purchase program itself. The decision and optimistic-looking summary of economic projections pressured the space, although T-Notes didn't quite revisit intraday lows. The space then rebounded/post-FOMC curve steepening reversed as Chair Powell's press conference went on, as he did not rule out future action if required. Essentially, Tsys round-tripped to pre-decision levels by the close of play, with yields finishing little changed across the curve on the day. U.S. fiscal matters are now at the fore into year end, with positive headlines surrounding that particular matter driving the space pre-FOMC. Disappointing retail sales data provided the standout local economic release on Wednesday.
• Weekly jobless claims data and housing starts/building permits are due on Thursday.