No Fiscal Deal Apparent, NFPs In View

T-Notes tight early on, with the contract last unchanged at 139-17+.

• The fiscal drama on the Hill continued on Thursday, as senior lawmakers failed to come to an agreement head of recess, with T-Notes unwinding early losses as a result. The contract finished the session a little shy of best levels as some positive headlines surrounding the COVID-19 situation provided a fresh bid for equities late in the day. Yields ultimately finished little changed.
• On the data front, PCE spending data beat exp. at the margins, while PCE income data missed. We also saw slightly lower than expected continuing and initial jobless claims readings, although the swings from previous readings and deviations vs. exp. were not meaningful. Elsewhere, the rate of expansion measured by the headline ISM m'fing reading slowed, missing expectations (which also provided some support to the Tsy space, allowing the complex to move away from session cheaps).
• The market holidays in the Asia-Pac region that we have mentioned elsewhere may limit activity in the Asia-Pac session ahead of Friday's NFP print.