Tight Overnight, Memorial Day Limits Activity With Cash Closed

Tsy futures clung to extremely tight ranges in Asia, with cash markets closed and liquidity thinned owing to the observance of the Memorial Day holiday in the U.S.

• The previously outlined risk-positive backdrop, which largely focused on the unwind of some COVID restrictions in the Chinese cities of Shanghai & Beijing (in addition to a raft of economic support unveiled for the former) failed to have a meaningful impact on Tsy futures (granted the S&P 500 is only +0.5% vs. settlement levels), although some light pressure has been observed as European traders start to file in.
• That leaves TYU2 -0-01+ at 120-03, with that level representing the base of the 0-05 overnight range. Note that the contract is operating on very light volume, with under 40K lots changing hands thus far.
• German CPI data and the continuing discussions re: the next round of EU sanctions on Russian oil exports will likely garner most of the interest on Monday.
• A quick reminder that cash Tsys will not be open until Tuesday’s Asia-Pac session, while Tsy futures will be subjected to holiday-curtailed hours on Monday.