Calm Start to Week, Focus on  FOMC Minutes Wednesday

Relative calm start to the week, modest volumes with TYM1 just over 1M futures by the close. Limited data for the week as a whole focus on housing related data, Markit PMIs Friday. Fed-speak book-ends the April FOMC minutes release on Wednesday.

• US Chamber of Commerce announces line-up for Tuesday-Wednesday Global Forum on Economic Recovery, includes Tsy Sec Yellen.
• While still "mostly Transitory", the Fed is keeping close eye on inflation risks. Fed VC Clarida: "my baseline view is that most of this is likely to be transitory, but we have to be attuned and attentive to the incoming data," adding he sees the economy growing 6.5%-7% this year.
• Coming into the session, flow included deal-tied selling in 3s-5s, fund and swap-tied selling in 10s, and a pick-up in Jun/Sep quarterly roll volume (first notice May 28).
• Outsized issuance spurring pick up in rate lock selling, weighing on Tsys in late trade. $7B 5pt from UnitedHealth helped push total issuance just over $18.5B/day.
• Block: FVM/WNM: both legs through the offer, but ratio close to the CME's 6:1 hedge ratio, appears to be a flattener at 1033:08ET:
  • 13,022 FVM1 124-04.5, through 124-03.75 post time offer
  • 2,033 WNM1 184-04, well through 183-26 post time offer
• The 2-Yr yield is up 0.4bps at 0.1511%, 5-Yr is up 1.6bps at 0.8291%, 10-Yr is up 1.2bps at 1.6403%, and 30-Yr is up 1.4bps at 2.3538%.