Tight Overnight

Very modest twist steepening was seen in Asia-Pac cash Tsy trade, although 30s only sit 0.7bp cheaper vs. Thursday's closing levels. Macro headline and market flow was light, with participants seemingly happy to await developments surrounding the well-documented headline risk factors in play at present. T-Notes last -0-01 at 137-27+, with the contract holding to a narrow 0-02 range thus far, on volume of 41K.

• The U.S. Tsy curve bull flattened during Thursday trade, against a backdrop of Brexit worry, mixed domestic data and little in the way of tangible progress re: domestic fiscal matters in DC, with 30s richening by over 5.0bp come the close. Price action was choppy but contained over the ECB meeting before the aforementioned matters returned to the fore, allowing T-Notes to push on, as the contract finished Thursday around late NY highs. The latest 30-Year auction aided the flattening narrative, stopping through WI by well over 1.0bp, while the cover ratio firmed to above recent average levels and dealer participation slid.
• Eurodollar futures are little changed vs. settlement through the reds, with a 15K screen seller of EDH1 providing the highlight on the flow side overnight.
• PPI & UoM sentiment data headline the local docket on Friday, with one eye on whether the Senate manages to pass a vote on the stopgap funding measures that would prevent a government shutdown (they were expected to vote on Thursday, but some last minute objections have created some issues).