Asia Assesses The Bounce

A quiet re-open for T-Notes after the contract went out around best levels of the day on Tuesday, last +0-02 at 136-14+.

• Tsys recovered from intraday cheaps in the wake of a strong 10-Year Tsy auction, with the recent concession facilitating strong demand. Tsys were unchanged to a little richer across the curve come the closing bell, with 10s representing the firmest point on the curve (richening by around 2.0bp). A large block buy of TYH1 futures aided the post-auction momentum. This came after a large block sale of ultra-bond futures helped add some extra pressure during the early sell off.
• In terms of auction specifics, 10-Year supply stopped through WI 0.8bp, while the cover nudged back above the recent averages and dealer takedown hit multi-month lows as direct participation moved higher.
• Tuesday's Fedspeak was in line with the central Fed narrative, with some of the more notable hawks within the Fed maintaining their support of the central Fed view. This comes after some recent comments from regional Fed Presidents touched on the potential for asset purchase tapering in the not too distant future.
• There is a lack of tier 1 data slated during Asia-Pac hours, so broader headline flow will likely dictate price action during Wednesday's Asia session.