Regaining Some Poise In Asia After Dramatic Sell Off On Thursday

Core FI was subjected to some volatility during Asia-Pac hours, with news that U.S. Democrats cannot include a $15/hour minimum wage in their COVID relief package, per the ruling of a Senate official (high ranking Dem senators are seemingly trying to come up with a workaround), allowing the space to unwind some early/overnight weakness, although trade continued to be choppy and active, with the space operating shy of best levels at typing. Continued weakness in equity markets and the aforementioned fiscal news provided an underlying bid on ensuing pullbacks.

• TYM1 last +0-08+ at 132-27+, with the belly of the curve seeing some light outperformance after yesterday's dramatic cheapening (5s sit ~5.0bp richer at typing). Activity was comfortably above average, with T-Note volume nearing 350K ahead of European hours.
• As a reminder, the belly of the curve provided the weak point on Thursday with the wings cheapening by 4-5bp, while 5s sat ~21bp cheaper come the closing bell, cheapening by ~24bp on the 2-/5-/10-Year butterfly. Weakness in Antipodean FI markets made for a soft start to Asia-Pac trade on Thursday, with momentum building through European hours. NY trade then saw an acceleration on the lack of pushback re: the recent yield moves from various Fed officials, including NY Fed President Williams, with positive weekly jobless claims & durable goods data witnessed, followed up by a very soft round of 7-Year Tsy supply. In terms of auction specifics, Thursday's volatility resulted in a tail width of just over 4.0bp, with the cover ratio cratering and dealer takedown surging, allowing the 5-/30-Year yield spread to flatten to fresh intraday lows post-auction on the back of profit taking/stops in steepener positions.
• PCE & Chicago PMI data headline locally today.