Assessing A Narrow Day

A narrow re-open for T-Notes, trading around late NY levels, last +0-00+ at 132-13.

• As a reminder, Tsys were rangebound on Tuesday, with T-Notes failing to make a meaningful break below Monday's low despite a couple of attempts, with the contract finishing NY trade just shy of best levels. Cash Tsys were little changed to a touch firmer come the bell, with the wings underperforming, while the 5- to 7-Year sector richened by ~2.0bp.
• Tier 1 news flow was relatively limited, with a light bid seen on the back of softer than expected U.S. housing starts data, allowing T-Notes to tag fresh session highs, ultimately setting an upper boundary for the contract on the day.
• A negative day for equities and some downwards pressure in crude oil (linked to later dispelled chatter of a significant breakthrough in the Iranian talks) also provided bouts of (modest) demand for Tsys.
• Elsewhere, brisk $ IG issuance continued, with participants now focused on Wednesday's 20-Year Tsy auction.
• A quick look at Wednesday's Asia-Pac docket reveals nothing in the way of notable tier 1 risk events. In addition to the aforementioned round of 20-Year Tsy supply, Wednesday's U.S. docket includes the release of the minutes from the latest FOMC decision, which will be supplemented by commentary from Fed's Quarles, Bostic & Bullard.