Twist Steepening Early On, NFP The Headline Risk Event Into Weekend

Cash Tsys are 1bp richer to 1bp cheaper, adding to yesterday’s twist steepening move (cash Tsys were closed overnight owing to the observance of a Japanese holiday).

• TYM3 has edged away from session lows that came shortly after the cash re-open, last -0-09+ at 116-08+, sitting well within the boundaries of Thursday’s range.
• Regional banking sector tumult continues to get plenty of airtime, with several names flagging considerations of their strategic options in recent days. The latest BBG source piece surrounding that space has suggested that “the U.S. is poised to exempt smaller lenders from kicking in extra money to replenish the government’s bedrock deposit insurance fund, and instead saddle the biggest banks with much of the bill.”
• Meanwhile, money market fund usage continues to push higher, moving to fresh all-time highs, present continued headwinds for regional banks.
• Post-meeting ECB speak and the central bank’s survey of professional forecasters present the focal points pre-NY.
• Still, it will be the latest NFP print that dominates today, especially with FOMC-dated OIS now pricing in ~15bp of cuts come the end of the July FOMC and ~90bp of cuts by year-end. Our full preview of that event is available here.
• Fedpseak is also back on the radar after the post-meeting blackout lifts, with Governor Cook. Minneapolis Fed President Kashkari and St. Louis Fed President Bullard all slated to speak ahead of the weekend. Keep your eyes on the usual media outlets for additional post-FOMC interviews.