Tight Pre-ECB Trade

Tsys stuck to a narrow range in Asia-Pac dealing, initially nudging higher on a modest downtick in e-mini futures (aided by Microsoft becoming the latest tech giant to pullback on hiring plans).

• That was before the confirmation of the resumption of gas flows through the Nord Stream 1 pipeline running between Russia & Europe, which took place on time after the end of the line’s maintenance period. That news flow sees the space back from best levels, with e-minis back to neutral levels.
• Still, TYU2 operates in a very narrow 0-05+ range, printing +0-03+ at 117-28+ ahead of London hours, on light volume of ~50K as the proximity to the ECB decision keeps many sidelined. Cash Tsys run 0.5-1.0bp richer across the curve.
• Italian political matters (with PM Draghi’s official resignation seemingly due on Thursday) & the ECB monetary policy decision will shape early trade today (with the 25/50bp rate hike decision and details surrounding the ECB’s anti-fragmentation tool providing the two key points of focus for the latter). Meanwhile, Thursday’s NY docket is headlined by the latest Philly Fed survey, weekly jobless claims data & 10-Year TIPS supply.
• Also remember that comments/developments surrounding the Nord Stream pipeline present headline risk after the aforementioned resumption of flows.