Typically Tight Independence Day Session In Asia

T-Notes stuck to a 0-03 range overnight, with the contract last +0-02+ at 132-24 on ~31K lots, with cash markets set to remain closed on Monday owing to the observance of the U.S. Independence Day holiday (CME trading hours will also be adjusted). The space has looked through the much softer than expected Chinese Caixin Services PMI print, which slowed to a near-neutral 50.3. The text of the release noted that "the recent resurgence of Covid-19 in the Pearl River Delta had a certain impact on the services sector." A positive, albeit negative factor on the headline reading, was that "the gauge for input prices remained in expansionary territory for the 12th month in June, but fell to the lowest point in 9 months."

• As a reminder, the mixed NFP print (better than expected headline accompanied by mixed details, including an unexpected 0.1 ppt uptick in the headline unemployment rate, although developments surrounding U6 unemployment were more encouraging) provided plenty of post-release vol., with the space ultimately turning bid during Friday's NY session, in what was perhaps a result of pre-release positioning as much as anything else. This allowed T-Notes to go out just shy of their late highs, while a holiday-shortened cash session saw richening across the curve come the early close, with the belly leading as 7s richened by a little over 4.0bp on the day. Post-payroll activity was headlined by ~80K of screen selling of the 2EZ1 99.000 puts, which seemingly represented an unwind of an existing long.