Tight Asia Session

Core fixed income markets struggled for anything in the way of meaningful direction in Asia-Pac dealing, with the latest round of Chinese manufacturing PMI data providing little to no impetus, although a firmer than expected official non-manufacturing PMI print may have provided a cap for core FI markets overnight (note that the better-than-expected print was seemingly driven by price increases and business expectations). A reminder that China is set to start a week-long holiday on Friday, while Hong Kong markets will also be closed on Friday, but return on Monday.

• An uptick in e-minis has seen T-Notes move off highs to last trade +0-05 at 131-20, sticking within a narrow 0-04 range. Cash Tsys run little changed to 0.5bp cheaper across the curve. Senate Majority Leader Schumer pointed to a bipartisan deal to keep the government funded until December 3, although the hurdles to increased fiscal spending and debt ceiling worries remain evident.
• To recap, Wednesday's Asia-Pac dip buying extended through European trade as participants looked to fade the recent aggressive cheapening in the space, with T-Notes topping out around the time NY participants started to file in. A 4,614 block seller of UXYZ1 futures helped the space off of richest levels early in the NY session. Tsys ultimately finishing the day richer across the curve, as yields fell by circa 1-3bp with 5s outperforming. Block flow in the futures space then helped to shape the second half of NY trade, with 4,519 USZ1 given around 13:00 NY, taking the contract to fresh NY session lows (although the early Asia-Pac lows were not challenged), before a late 7,843 block buy of TYZ1 helped the space to firm a little into the close. Wednesday's Fedspeak didn't move the needle.
• A raft of Fedspeak headlines during NY hours, with weekly jobless claims data and the latest MNI Chicago PMI print also due.