Twist Flatten As Risk Sentiment Improves

(MNI Australia) TYH3 deals at 112-15+ in line with levels seen in late NY dealing.

• Cash tsys twist flattened on Thursday with the major benchmarks running 1bp cheaper to 7bps richer at the bell, pivoting around 3s.
• Initial Jobless Claims printed in-line with market expectations at 225k.
• Italian authorities said they didn't find any new concerning Covid mutations in recent arrivals from China, and EU health officials pushed back on travel restrictions for Chinese travelers.
• Cross asset flows reflected improving risk sentiment. US equities were firmer, S&P500 up ~1.7%, and DXY was down ~0.5%, while WTI fell ~0.5%.
• Tsys briefly pared gains as the 7Y note auction generated a tail of ~2bps and a below average dealer takedown.
• Fed dated OIS is pricing ~32bp of tightening for the Feb ’23 meeting, remaining stable. Terminal rate pricing fell ~7bps yesterday to 4.95%.
• There is a thin data calendar today in Asia-Pac. Further out MNI Chicago PMI provides the highlight of an otherwise limited session data-wise.