Winding Into NFPs

Light macro-headline flow and the traditional pre-NFP Asia-Pac lull has made for limited U.S. Tsy trading, with a 0-03 range for T-Notes overnight, last dealing +0-02 at 137-23, while cash Tsys are little changed along the curve. Sino-U.S. tension, the fiscal situation in DC and the tail end of President Trump's days in office continue to dominate on the headline front, in addition to COVID matters.

• Thursday's session saw the curve bull flatten, with the long end richening by a little over 3.0bp. Late NY headline flow saw Moderna cut its 2020 COVID-19 vaccine distribution target by 50% which provided a knee jerk move higher, with T-Notes hitting fresh session highs as a result. U.S. data was generally positive, but broader focus fell on the USD's continued run of weakness, although the DXY recovered from worst levels of the day. On the fiscal front, Senate majority leader McConnell pointed towards an agreement being within reach, although Democratic counterpart Schumer flagged a lack of inclination re: a compromise from the Republican side.
• Friday sees the release of NFPs, factory orders and the final durables goods orders. Elsewhere, Fedspeak from Bowman, Evans & Kashkari is due.