A tight start for T-Notes last +0-00+ at....>

US TSYS: A tight start for T-Notes last +0-00+ at 139-01, with cash Tsys closed

until the London open owing to a Japanese holiday.

- Soft domestic data points and swap spread tightening underpinned the Tsy space

in NY hours, allowing the curve to bull flatten, with T-Notes closing just back

from best levels.

- 7-Year supply was solid enough, but not as strong as the 2- & 5-Year auctions

witnessed Monday, generating a 0.1bp tail, moderation in cover ratio (although

that measure still sat in line with the recent averages) and average take-down

metrics.

- Focus shifts to the impending Fed decision. Substantive policy action is

unlikely at the April FOMC, a view that is shared by the vast majority of

sell-side analysts. Most areas of market functioning have smoothed out after a

stormy March, and while economic data have been predictably disastrous, it is

only in the coming months that we will have a fuller sense of the damage that

COVID-19 and the associated lockdown are doing to the economy in the near-term.