Curve Flattens On Monday

TYH3 deals at 114-24, +0-02, in line with levels seen in late NY dealing.

• Cash Tsys were 2-6bp cheaper across the major benchmarks on Monday, as the curve flattened.
• Further hawkish ECB speak was the catalyst for pressure on Tsys, while set up for this week's Tsy supply was also touted, alongside a building IG$ issuance slate.
• Screen sellers, as volumes ran below average due to the Lunar NY holiday, helped extend the move lower, while block flow was mixed in directional bias terms.
• The space looked through the leading indicator print, which printed marginally weaker than expected.
• Tsys then firmed off lows in the NY session, respecting tight ranges, as the USD weakened into the London FX fix, before drifting lower again.
• PMI data from Japan headlines today's Asia-Pac session. China, Hong Kong & Singapore remain closed due to the Lunar NY holiday, wider regional liquidity will be affected as a result. Further out we have PMIs from the U.S. as well as Philadelphia Fed Non-Manufacturing Activity and Richmond Fed Manufacturing Index. On the supply side we have the latest 2-year auction.