T-Notes Tight, Pinned To Wednesday's High, Cash Opens In London Hours

T-Notes remain stuck in the 0-02 range established early in Asia-Pac hours, last +0-01 at 136-30+, looking through the communique surrounding the Biden-Xi phone call, with no smoking guns revealed. Ahead of the call a senior U.S. official told RTRS that "President Joe Biden's administration will look at adding "new targeted restrictions" on certain sensitive technology exports to China in cooperation with allies." Flow remained sub-par owing to the earlier flagged holidays evident across the Asia-Pac region, with cash Tsys closed until London hours on the back of a Japanese holiday. T-Notes have seen ~55K lots trade on the day.

• As a reminder, Wednesday saw T-Notes finish NY trade at best levels of the day, while the broader Tsy space richened, with bull flattening in play as 30s finished the session 4.0bp richer, aided by softer than expected U.S. CPI data and reassuring tones from Fed Chair Powell re: the longevity and need for monetary stimulus. Powell noted that "published unemployment rates during COVID have dramatically understated the deterioration in the labor market"… correcting misclassifications "and counting those who have left the labor force since last February as unemployed would boost the unemployment rate to close to 10% in January." Looking ahead, Powell stressed that "we will not tighten monetary policy solely in response to a strong labor market." 10-Year Tsy supply stopped through WI by 0.2bp, with dealer takedown pretty much unchanged at sub-average levels. Elsewhere, the auction saw a slight moderation in the cover ratio vs. prev. falling back in line with the 6-auction average.
• 30-Year supply and weekly jobless claims data headlines the local docket on Thursday.