TYZ1 Off NY Highs, Cash Closed Until London

The lower than expected NZ unemployment rate flagged elsewhere is applying pressure to TYZ1 in early Asia-Pac dealing, leaving the contract -0-03 at 130-28 after it finished a touch shy of its NY highs on Tuesday.

• A reminder that cash Tsys will be closed until London hours, owing to a Japanese holiday.
• The curve bull steepened on Tuesday, with 2s richening by ~5bp and 30s little changed come the bell. The front end of the curve was supported by an unwind of rate hike bets ahead of tomorrow's FOMC decision, with the red Eurodollar contracts firming by ~10bp on the day. Block buys in TU futures (+6,816 during the NY morning and +10,500 late in the day) helped underscore the bid in the front end.
• Looking ahead to Wednesday's NY session, ADP employment data is due on Wednesday (ahead of Friday's NFP print). Elsewhere, the aforementioned FOMC decision is expected to result in a $15bn/month tapering announcement, while most of the attention is set to fall on the Fed's communication surrounding inflation dynamics and any further signals on the rate hike outlook.