NASDAQ Weakness Supports Overnight

Earnings-driven weakness for NASDAQ 100 e-minis provided some modest support for U.S. Tsys overnight, although there has been a move away from session extremes. TYH2 last +0-01 at 128-05, trading a touch shy of the peak of a 0-06+ range. Meanwhile, cash Tsys run 0.5-1.5bp richer across the curve, with very modest bull steepening in play. Block buys of FVH2 futures (+1,250 & +1,792) headlined on the flow side.

• To recap, cash Tsys were flat to ~1.5bp richer come the bell on Wednesday, with 7s outperforming. The bid was aided by ADP employment data missing expectations by almost 500K (falling 301K), a quarterly Tsy refunding announcement that was largely in line with exp. (the cuts to 20-Year supply were a touch larger than most expected) and the U.S. announcing the deployment of troops in eastern Europe. Still, gains on Wall St. likely helped temper the bid. Flow was headlined by block buys in FVH2 (+8,984 & +7.5K).
• Thursday’s busy NY docket includes the ISM services survey, factory & durable goods data, weekly jobless claims, unit labour costs and challenger job cuts. We will also get the testimonies of Fed Governor nominees Raskin, Cook & Jefferson (the pre-released initial comments from the 3 didn’t reveal any major talking points, with a focus on inflation front & centre). Further afield, monetary policy decisions from the ECB & BoE will provide interest during early NY hours.