Tight Ranges Still In Play

TYU2 registered fresh session highs in recent dealing, but the contract still operates within the confines of a narrow 0-05 range, last +0-03 at 119-18+. The space has drawn very light support from the previously outlined Chinese White Paper pointing to the “resolve of the Communist Party of China (CPC) and the Chinese people and their commitment to national reunification” alongside an assertion which noted “Taiwan has never been a state; its status as part of China is unalterable” (see earlier bullet for more details). The wider cash Tsy curve has twist steepened, with the major benchmarks running 1.5bp richer to 0.5bp cheaper, pivoting around 5s. A $190K DV01 block buy in TU futures (+5K) has also helped underpin the front of the curve. Still, wider activity remains limited ahead of the CPI print.