Belly Leads Rally Again

A flat re-open for T-Notes, dealing just shy of the NY highs, +0-01 at 133-18 (referencing TYZ1).

• The belly outperformed once again on Monday, with the major benchmarks finishing 1.5-3.5bp richer on the day come the close of cash Tsy trade as the post-Powell rally continued.
• A block sale of US futures (-7,753, ~$1.484mn DV01) helped stall the rally in the late NY morning, before the space traded to fresh intraday highs as we moved through the afternoon.
• The move higher came alongside another uptick in equities, with volume subdued given the lack of headline catalysts and a UK holiday.
• Fed's Mester ('22 voter, hawk) told RTRS that "she is not yet convinced that recent inflation readings will be enough to satisfy the price stability goal the U.S. central bank revamped a year ago."
• Short-end flow was headlined by a 25K screen buyer of EDZ1 and a ~50K screen buyer of EDU3/Z3.
• Official PMI data out of China tops the broader docket during Asia-Pac hours. Meanwhile, Tuesday's U.S. docket will be headlined by the latest MNI Chicago PMI print and consumer confidence reading.