About Turn

T-Notes coil in Asia-Pac trade, last +0-02 at 139-03+. This comes after the contract traded to fresh session highs late in Tuesday's NY session as U.S. President Trump pulled the proverbial rug from underneath the ongoing fiscal aid discussions, until after the November election (curiously, he has since agreed with a statement from Fed Chair Powell which called for more help from Congress, and stressed that there's a low risk of 'overdoing it'). This flipped the momentum on the curve, with flattening moving to the fore in late NY dealing, allowing longer end yields to move back into the prevailing range witnessed over the last few months.

• The latest 3-Year auction saw a very modest tail, with the cover ratio and takedown metrics largely in line with the recent averages.
• At the close of play J.P.Morgan noted that 10-Year Tsys "have outpaced their drivers somewhat in recent days, and now appear modestly high relative to fair value… Meanwhile, the indicators we watch suggest that positioning and sentiment in rates has become more bearish recently." They did stress that these deviations are not particularly overstretched at present, but did note they pose some risk to shorts.
• Eurodollar futures sit unchanged to 1.0 tick lower through the reds.
• There is little in the way of tier one risk slated for Asia-Pac hours, with liquidity set to be sapped by the ongoing Chinese holidays.