Narrow Overnight

Tsys lacked anything in the way of meaningful traction overnight, operating shy of their respective Wednesday peaks. The major cash Tsy benchmarks run 1.0-2.0bp cheaper across the curve as a result, sticking to tight ranges. TYU2 is +0-06 at 120-09, 0-01+ off the base of its 0-06+ range, on sub-par volume of 60K lots.

• Given the lack of meaningful major news flow and proximity to Friday’s NFP print, we would suggest that today’s Asia-Pac session has been more of a time to reflect for regional participants. This comes after a ~33bp range for 10-Year yields over the last couple of sessions (peak to trough), with Tuesday’s move representing one of the largest intraday net swings observed over the last decade and included the failure of bulls to meaningfully test the 2.50% yield level (lows of 2.5143% were reached, representing the lowest yield level observed since early April).
• Early Asia trade saw contacts flag real money accounts’ desire to reduce duration exposure, perhaps ahead of event risk later in the week and after Pelosi’s visit to Taiwan came and went.
• Looking ahead, the latest BoE monetary policy decision will provide interest during the London-NY crossover (our full preview of that event is available here), with Challenger job cuts and weekly jobless claims data set to headline the economic releases during the NY session. We will also hear from Cleveland Fed President Mester (’22 voter).