Recovering Off Lows

Tsys have firmed through the early rounds of London dealing, with softer-than-expected French PMI data providing support in recent trade.

• That leaves TYH4 +0-02 at 112-18+, 0-10 off its overnight low, as shallow Asia-Pac losses are reversed.
• Cash Tsy yields run little changed to 1.5bp lower, with the belly outperforming at the margins.
• Flow wise, the previously flagged FV/WN flattener (~$350K DV01) has headlined, although that could have been a closing of an existing position, given flow steepener flow observed in late Asia/early European trade during recent sessions.
• Fed Funds futures show ~148bp of cuts through ’24 on the whole, while ~22bp of cuts are priced through the end of the Mar ’24 FOMC (the strip operates off post-FOMC dovish extremes, aided in part by ECB- & BoE-driven moves in European and UK STIR markets).
• Flash PMI data from across the globe is due throughout the day, while comments from NY Fed President Williams are set to garner attention after Wednesday’s FOMC dovish turn.
• Elsewhere, U.S. industrial production and Empire manufacturing data will hit.
• Mixed Chinese economic activity data provided little net impact for Tsys overnight.