TYZ1 Through Tech Support As Bostic Flags Potential For Quicker Taper

Comments from Atlanta Fed President Bostic ('21 FOMC voter) hit during the NY-Asia crossover. Bostic pointed to the potential for a faster tapering process (the latest Fed official to sing from that hymn sheet), which he noted would afford the central bank wider optionality. Still, Bostic flagged that further progress on the labour market front would add to the case for a faster taper, while highlighting the lingering risks stemming from COVID. Bostic's comments seemingly applied some delayed pressure to Tsy futures, although the lack of cash Tsy trade until London hours, owing to a Japanese holiday, may have limited broader activity/the scope of the move. TYZ1 last -0-04+ at 129-27+, 0-02 off the lower boundary of its 0-07 overnight range, with the pressure pushing the contract through the bear trigger (Oct 21 low of 129-31), which allows bears to switch focus to the 50% retracement of the Oct '18 to Mar '20 bull cycle (129-03). Broader macro headline flow was light at best. Flash PMIs from across the globe will headline ahead of NY hours, while the Thanksgiving-related front-loaded supply will continue, with 7-Year Tsy & 2-Year FRN supply due.

• JGBs were closed as Japan observed a national holiday.
• The dip in U.S. Tsy futures failed to provide any notable pressure to the Aussie bond space, with bears unable to force a retest of the early Sydney lows which came on the back of local reaction to the U.S. Tsy-driven overnight session weakness. YM closed -5.0, while XM closed -7.5. The 7- to 12-Year zone of the cash ACGB curve presented the weak point. There hasn't been anything in the way of notable idiosyncratic news flow to digest today.