Off Worst Levels Of Asia Trade, Little Changed Into European Hours

TYM2 last deals +0-00+ at 120-19+, 0-01+ shy of the peak of its 0-09 Asia range, while cash Tsys run at virtually unchanged levels across the curve.

• Tsys bounced from cheapest levels of Asia-Pac dealing, after initially being helped lower by a light bid in e-minis and the likes of the Nikkei 225 (as some flagged the potential for the Fed to pause its expeditious tightening cycle around year-end after a reference in the May meeting minutes). A heavy start for Chinese equities allowed the space to find a bit of a base, with a subsequent recovery from Chinese equities failing to provide any meaningful headwinds for Tsys.
• E-minis are still softer on the day, reversing early Asia gains on worries re: Chinese growth, while some pointed to tech giant Apple’s move to pay higher wages as another headwind for the space and an explanatory factor behind the NASDAQ 100 leading the way lower.
• There hasn’t really been much in the way of meaningful macro headline flow to digest, outside of China matters. This included China revealing its latest, limited fiscal and credit support measures, the partial re-opening of schools in Shanghai from early June and an uptick in throughput at the port of Shanghai.
• Thursday’s NY session will include weekly jobless claims & pending home sales data, the latest Kansas City Fed manufacturing activity survey, revised Q1 GDP readings and 7-Year Tsy supply. Elsewhere, Fedspeak will come from San Francisco Fed President Daly (’24 voter) and Vice Chair Brainard (on digital currencies).