2s Back Below 4%

Tsys nudged away from yesterday’s late NY lows during the Asia-Pac session, with little in the way of meaningful macro news flow evident, save a wider than expected monthly trade surplus out of China.

• That leaves the major cash Tsy benchmarks running 1.5-3.0bp richer in early London trade, after a modest extension of the Asia-Pac move, with some light bull steepening in play as 2s move back below 4.00% in yield terms. TYM3 trades +0-05+ at 115-11, 0-02+ off the top of a narrow 0-07 range on sub-standard volume of just under 84K.
• A quick reminder that a heavy corporate issuance slate (headlined by an Apple multi-parter), a positive start for regional bank equities (which faded) and the NY Fed’s quarterly SLOOS survey (not as bad as feared, despite painting a negative picture) provided the key sources of pressure on Monday.
• Looking ahead, Fedspeak from Jefferson & Williams, as well as any debt-ceiling rhetoric surrounding a Biden-McCarthy meeting, is set to garner most of the interest in NY hours. We will also see the latest round of 3-Year Tsy supply. The monthly NFIB small business survey headlines on the local data side.
• Outside of those matters, ECB speak and any addresses surrounding the Russian Victory Day holiday will generate interest further afield.