NFP Day

With oil futures back from their early Asia highs and ACGBs bid post-SOMP, the U.S. Tsy space regained some ground after a soft start to Asia-Pac trade. Note that a tweak to the PBoC's daily OMOs also provided a helping hand. TYZ1 last -0-04 at 131-06, while cash Tsys run flat to 1bp cheaper across the curve, as the belly provides some incremental underperformance. Odds of Fed Chair Powell being nominated to serve a second term rose after the WSJ reported that he was seen at the White House on Thursday, while Axios sources noted that "the White House is asking Democratic senators to meet with Federal Reserve chair Jerome Powell before Thanksgiving - leading some to believe President Biden will renominate him this month." On the flow side, some screen buying of TYZ1 131.75 calls has crept in over the last hour or so, with paper paying 0-16/17 on ~5.0K over that time.

• To recap, the BoE's choice to hold interest rates triggered widespread richening for core FI markets in early NY dealing on Thursday, with the continued cross-market impact from major central bank policy matters evident. This resulted in an unwind of some of the recently embedded FOMC rate hike premium. This meant that benchmark Tsys across the cash curve finished the day 4-8bp richer, with 7s leading the rally as the belly outperformed on the aforementioned FOMC pricing dynamics.
• NFPs headline the local docket on Friday, with Fedspeak from George & Quarles also due. BoE speak is also set to provide some interest (and potential cross-market impact) in the wake of yesterday's inaction on Threadneedle Street. On the fiscal front, Friday should bring the House vote on the well documented fiscal initiatives.