Carry-over SHort End Bid, Stocks Strong

Tsys trading mixed - bods weaker but off midmorning lows, short end firmer (but well off overnight highs) amid ongoing debate over hawkish policy and risk of over-hiking from Friday.

• No obvious headline trigger as bonds reversed early support - no react to Chicago Fed National Activity Index higher than expected at 0.1 vs. -0.1 est, August revised to 0.1 from 0.0.
• Weak US S&P Global PMI preliminary reports see short-end Tsys rally appr 4bps, US$ recede. The S&P composite surprisingly fell from 49.5 to 47.3 (cons 49.3), the second sharpest monthly decline since 2009 barring the initial pandemic period.
• Quiet second half w/ Fed in policy blackout through the Nov 2 FOMC. No substantive reaction to Rishi Sunak replacing Liz Truss as PM.
• Tuesday data on tap (prior, est): FHFA House Price Index MoM (-0.6%, -0.6%); S&P CoreLogic CS 20-City MoM SA (-0.44%, -0.80%); YoY (16.06%, 14.10%); Consumer Confidence (108.0, 106.0); Richmond Fed Mfg Index (0, -5).
• Q3 equity earnings annc pick up in earnest tomorrow: sampling of pre-open annc: United Parcel Service (UPS) $2.847 est; General Motors (GM) $1.893 est; General Electric (GE) $0.468 est;