Richer In Asia, TYM3 Bid Capped At Thursdays Highs

TYM3 deals at 116-05+, +0-06, with a 0-18 range observed on volume of ~134k.

• Cash tsys sit 4-5bps richer across the major benchmarks, the belly is leading the bid.
• The short end of the treasury curve was cheaper in early dealing as Asia-Pac participants digested remarks late in yesterday's NY session by Tsy Sec Yellen, she softened her language on deposit insurance pledging additional actions if warranted.
• Despite the absence of a headline driver tsys firmed off session lows. The bid extended as e-minis retreated from best levels and the USD firmed alongside the Yen.
• The bid was capped as TYM3 failed to break Thursday's NY session high (116-08) and 2s failed to break 3.75% as yields moved lower.
• Despite marginally paring gains tsys have held richer as we approach the European session.
• Preliminary PMIs from France, Germany and EU headline in Europe. Further out we have Durable Goods Orders and US flash IHS Markit Manufacturing Index and S&P Global Services Index. Fedspeak from St Louis Fed President Bullard will also cross.