Curve Bull Steepens As Cash Trade Opens

Tsy futures operate in narrow ranges, with TYU3 last +0-01+, operating on limited volume of ~52K. Cash Tsys are 1.5-2.5bp richer, bull steepening at the margin after a Japanese holiday kept the cash space closed until the London session. That, in addition to adverse weather conditions in Hong Kong, would have hampered futures activity in Asia-Pac hours.

• As noted elsewhere, softer than expect Y/Y Chinese GDP data & weaker Chinese equities provided some modest support for the space overnight.
• Weekend comments from Tsy Secretary Yellen saw her play down the idea of a rollback of Chinese trade restrictions, which would have done the modest bid no harm.
• A fresh downtick in crude oil futures would have also provided some support.
• The latest Empire manufacturing survey provides the highlight of the NY economic docket on Monday, with the Fed now in its pre-meeting blackout period.