Richer In Asia, Cross Market Flows Dominate

TYH3 deals at 112-07, +0-05+, a touch off the top of the 0-11+ range on volume of ~138K.

• Cash Tsys sit 1-2bp richer across the major benchmarks.
• Cross-market flows from ACGBs dominated in early dealing, as Tsys initially followed ACGBs lower pre-Australian labour market report.
• An unexpected uptick in Australian unemployment then saw ACGBs unwind early losses facilitating a recovery from session lows in Tsys.
• Pockets of screen buying in TY futures aided the bid, with a block buyer in FV futures also noted.
• The richening held through the remainder of the session.
• ECB speak from Panetta headlines the European session. Further out we have PPI, Jobless Claims, Housing Starts and the Philadelphia Fed Manufacturing Index. Cleveland Fed President Mester and St Louis Fed President Bullard will cross. We also have the latest 30-Year TIPS supply.