Curve Bull Steepens, Aided by Goolsbee

TY futures last show +0-05+ at 112-18+, 0-01 off the top of a contained 0-07+ range.

• Cash Tsy yields are 3bp lower to little changed, with the curve bull steepening.
• 2s10s and 5s30s hold within recent ranges.
• The weekend saw Chicago Fed President Goolsbee note that although it is too early to declare a victory in the battle against inflation, he expects a very substantial decline in inflation in ’24. He also reaffirmed that Fed’s data-dependent, meeting by meeting approach, along with providing some typically dovish soundbites. This has probably provided some incremental support to the front end today.
• Elsewhere, an ex-PBoC advisor suggested that China should reduce its Tsy holdings.
• Fed Funds futures show ~145bp of cuts through ’24 (vs. last week’s extreme of ~164bp), with ~21bp of cuts showing through the end of the March ’24 FOMC.
• Lower tier data (NY Fed services activity & NAHB housing market readings) and further commentary from Goolsbee headline the NY docket today.