Tight Asia Trade

Friday provided a very limited round of Asia-Pac Tsy trade as participants assessed bid in Hong Kong equities, the latest round of credit stress in the Chinese property developer sphere and Sino-U.S. tensions after a BBG source report noted that “the US and Taiwan are planning to announce negotiations to deepen economic ties, people familiar with the matter said, in a fresh challenge to Beijing, which has cautioned Washington on its relationship with the island.”

• Ultimately, Tsys are little changed on the day, with TYU2 +0-01 at 120-08, sticking to a tight 0-07 range on light volume of 80K (~20K of which is roll related). Cash Tsys are flat to 1.5bp richer across the curve, with 2s outperforming.
• PCE & the final UoM survey reading headline the NY docket on Friday, with the Dallas Fed m’fing activity print also due.
• A quick reminder that the U.S. will observe the Memorial Day holiday on Monday, which will result in curtailed cash Tsy trade on Friday, in addition to a cash Tsy closure and shortened futures trade on Monday.