Asia Wakes Up To A Rally

A steady re-open for T-Notes, with the contract dealing +0-00+ at 137-12+ at typing.

• T-Notes ground higher during Monday trade, with focus falling on COVID-19 vaccine matters, centring on AstraZeneca's vaccine quota issues for the EU, as well as Merck pulling the plug on their vaccine trial, while AstraZeneca was quick to downplay questions re: the efficacy of its vaccine amongst the 65+ age group. Matters surrounding tighter COVID-19 lockdowns around Europe also came to the fore, after taking a backseat in Asia-Pac dealing. A softer than expected round of German IFO data was also in the mix ahead of NY hours, while simultaneous block buys of TU, TY & UXY helped generate further support during the NY morning.
• This left T-Notes around best levels at the bell, even with equities off of lows (S&P 500 closed higher on the day), while the curve bull flattened, as 30s richened by 5.5bp on the day.
• The rally didn't present any takedown issues at the latest round of 2-Year Tsy supply, with the auction stopping through WI by 0.2bp, while the cover edged above the recent averages and dealer participation dipped as indirect takedown jumped.
• There is little of note on the Asia-Pac docket on Tuesday, with the Australian national holiday having the potential to limit activity ahead of European hours.