China Matters Headline In Asia, Focus Reverts To 20-Year Supply Tuesday

Core fixed income was generally contained during Asia-Pac hours, with a relatively sizable liquidity injection from the PBoC, stronger than expected Chinese economic data and a firmer Chinese yuan the major takeaways in the macro arena, effectively capping the space during overnight trade.

• T-Notes held a tight range around the late lows registered on Monday, last printing unchanged at 139-18+, with yields running unchanged to 0.5bp richer across the cash curve.
• The U.S. curve flattened at the margin on Monday, with yields running unchanged to marginally cheaper come the bell. The space was a little more insulated than equities, with the latter proving more susceptible to COVID-19 vaccine headline flow (both good and bad), in addition to a deluge of M&A news. 3-Month FRA/OIS jumped during Monday hours on the Eurodollar roll.
• Eurodollar futures unchanged to +0.5 through the reds last.
• Focus now reverts to domestic matters, with 20-Year Tsy supply, empire state manufacturing and industrial production data all due.