A Touch Softer In Asia, But Holding Most Of Friday's Gains

T-Notes print -0-03+ at 132-03, hovering just above session lows as Tsys trade a touch softer across the board after a peculiar pop through Friday's highs for longer dated Tsy futures around the re-open, which was quickly reversed. Cash Tsys run 0.5 to 2.0bp cheaper across the curve, with light bear flattening in play. Weekend focus fell on the G7's agreement re: the broader implementation of a minimum corporate tax rate structure, as they look to fight tax evasion, notably within the big tech space, while a BBG interview with U.S. Tsy Secretary Yellen is also garnering attention. Yellen noted that U.S. President Biden should push on with his $4tn spending schemes, even if they may result in inflation spill over into '22 and higher interest rate settings from the Fed. Elsewhere on the U.S. fiscal front, the weekend saw U.S. Energy Secretary Granholm tell CNN that the U.S. House will start the mark-up of an infrastructure bill on Wednesday, with or without Republican support.

• As a reminder, Friday saw the 10- to 20-Year zone of the curve lead the rally in the wake of a disappointing headline NFP print, with that zone of the curve firming by ~7.5bp. Questions surrounding perceptions re: the Fed's taper schedule (in the wake of a second consecutive softer than expected NFP print) drove the richening, with signs of short cover evident into the weekend. A lack of subsequent catalysts allowed rates to finish Friday at/around richest levels.
• U.S. fiscal developments will likely continue to garner most of the attention during Monday's U.S. session, with the Fed now in its pre-meeting blackout period & a lack of meaningful domestic data apparent.