A flat start for TYU2, last dealing -0-09 at 118-08, after the contract finished shy of best levels on Thursday. To recap, cash Tsys were 4-11bp richer come the bell, with the belly leading the bid and the long end lagging. 10-Year yields traded back below 3.00% for the bulk of the NY afternoon, before some cheapening into the bell. Quarter-end rebalancing flows and the continued focus on swelling chances of Fed tightening triggering a recession (Atlanta Fed GDP now metric revised to -1.0% for Q2, which, if it came to pass, would represent a technical recession) were cited as continued factors supporting the bid.

• A bid in the EGB space provided support in pre-NY dealing, before fresh worry surrounding the health of the consumer/households, stemming from a marginally softer than expected real consumer spending print (coupled with a miss in headline personal spending data), supported Tsys further in early NY trade. Elsewhere, PCE deflator metrics provided a 0.1ppt miss across the board, while the latest MNI Chicago Fed PMI print provided a downside miss when it came to the headline print (56.0 vs. BBG median of 58.0 and prior 60.3).
• Breakevens were narrower across the curve, with WTI crude futures ~$4 lower at settlement time, while equities were lower (S&P 500 -0.9% at the close), also factoring into the Tsy bid.
• M’fing PMI data from across the globe will be eyed ahead of NY hours (although some of the prints represent final readings), while Friday’s domestic docket will be headlined by the ISM m’fing survey.
• A quick reminder that the Independence Day Holiday (which will be observed on Monday) means that SIFMA recommend an early cash Tsy close on Friday (14:00 NY/19:00 London), although Tsy futures will be open for usual trading hours ahead of the weekend. Elsewhere, a holiday in Hong Kong will limit wider liquidity during the Asia-Pac timezone.