A Touch Firmer In Asia, Tight Ranges In Play

T-Notes held to a very narrow 0-03 range overnight, last +0-03+ at 132-20. Cash Tsys trade unchanged to 1.0bp richer across the curve. Headline flow remains light, with ongoing bi-partisan Senator level meetings re: fiscal matters confirmed for this week, although certain, high-ranking quarters of the Democratic party continue to point towards the need for reconciliation measures. Elsewhere, the latest U.S. naval incursions into the South China Sea had little impact on broader sentiment.

• T-Notes went out just off worst levels of the day on Monday as the major benchmarks across the U.S. cash Tsy curve cheapened by 1.0 to ~5.0bp, with 7s providing the weak point on the curve. This came as participants positioned for the impending round of 20-Year Tsy supply as well as Wednesday's FOMC decision, after what seemed to be a bit of a positioning washout (with shorts capitulating) last week. A 5,450 lot FV futures block sale also fed into the broader cheapening theme on Monday, as did a relatively busy US$ corporate issuance slate. Elsewhere, there was some focus on the latest 3-Year ahead consumer inflation expectation release from the NY Fed, which saw a multi-year high registered.
• Broader interest will continue to fall on the setup for the latest FOMC decision, with the aforementioned round of 20-Year Tsy supply and retail sales data headlining the U.S. docket on Tuesday.