Removal Of Some Fed Support Lines Weighs On Sentiment

T-Notes build on the late NY bid, which saw the contract go out at best levels on Thursday, last +0-07+ at 138-19.

• This comes after the unwind of some of the Fed's support facilities stole the headlines during the NY/Asia crossover, with the move forced by the U.S. Tsy, while the central bank noted that it "would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy." Tsy Secretary Mnuchin requested the return of any unused funds, which sums to ~$455bn.
• Cash Tsys bull flattened on the move, with 30s going out ~5.5bp richer on the day.
• Familiar matters had been in play during NY hours, with a focus on the U.S. COVID situation, vaccine developments and parties in DC preparing to come back to the table re: fiscal support discussions. Further mobility restrictions have been outlined in the states of California & Ohio since the closing bell in NY.
• The stimulus talk headlines supported equities and weighed on Tsys in late NY trade, before the aforementioned headlines from the U.S. Tsy hit. E-minis are biased lower in early Asia trading, although the S&P 500 e-mini has not tested Thursday's low, yet.