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A tight re-open for T-Notes with the........>

US TSYS: A tight re-open for T-Notes with the contract last -0-02 at 129-00.
- Monday saw a bid (most of which occurred at the re-open) in the space owing to
the introduction of a wider geopolitical risk premium in lieu of the
well-documented weekend attack on the major Saudi crude facilities, with soft
Chinese economic data also lending support. U.S. President Trump stopped short
of laying the blame fully on Iran (despite his "locked and loaded" tweet), but
he did intimate that he believes that the Gulf state was behind the attack.
- Flow included deal-tied hedging on >$8bn worth of high grade issuance, real
money a/c buying of 10s and 3-Month/10-Year flatteners after the recessionary
indicator moved away from inverted lows over the past couple of weeks.
- Short-end desks noted the jump in O/N repo, which got a wider airing, but most
suggested that the surge was likely tied to corporate tax obligations & Tsy
- Moving to Tuesday, production data provides the highlight of the local docket,
with the fallout from the weekend attacks on Saudi still front & centre pre-FOMC
(with the latest MonPol decision scheduled for Wednesday).
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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