Firmer As Risk-Off Flows Kick In, Heavy Tsy Issuance Slate Eyed

The space has drawn a degree of support from weekend developments, including the abrupt ouster of Turkey's central bank chief, in the wake a larger than expected interest rate hike delivered by the CBRT last week. T-Notes have been in demand from the off and last trades +0-07 at 131-14, hitting session highs. Cash Tsy curve has bull flattened, with yields last seen 0.2-2.5bp lower & 10s slipping through the 1.7% mark (last sits at 1.696%). Eurodollar futures run unch. to +0.5 tick through the reds.

• Press coverage from over the weekend seemed to be net negative, with familiar geopolitical tensions continuing to simmer. Iran's Ayatollah Khamenei said Tehran "shouldn't burn opportunities, but shouldn't hurry either" to revive the 2015 nuclear deal, while the EU/UK spat over Covid-19 vaccine supplies further escalated.
• Fed's Barkin told BBG that the U.S. is on the course for a strong performance this year. Barkin said he expected price pressures to emerge amid a receding pandemic, but didn't see a risk of unwanted inflation. He emphasised that "inflation is not a one-year phenomenon, it's a multi-year phenomenon."
• Fed Chair Powell wrote in a WSJ op-ed that the Fed will continue to provide monetary stimulus "for as long as it takes."
• The U.S. docket today features existing home sales & comments from Fed's Powell, Barkin, Quarles, Daly & Bowman.
• This week brings a heavy issuance slate, which includes 2-Year, 5-Year & 7-Year Notes. Thursday's seven-year auction will draw particular interest after last month's supply of that tenor drew the lowest bid/cover ratio on record.