Firmer On Monday, Belly Outperforms

A muted re-open for T-Notes, last printing +0-00+ at 132-11, after rallying on Monday, but ultimately finishing a little shy of best levels.

• Cash Tsy trade saw the 7- to 10-Year sector outperform, richening by ~3.0bp come Monday's bell, after pre-NY cheapening on the back of a dip in Bunds in holiday-thinned conditions (UK, Japan & China were out on Monday). A bid then came into the space as cash trade opened in NY hours, with T-Notes subsequently testing last week's high on the back of a softer than expected ISM m'fing survey (which still topped 60.0, while the prices paid component nearly hit 90.0). Fedspeak from Powell, Williams & Barkin failed to break new ground. IG issuance may have provided some pressure on the longer end.
• The latest RBA decision provides the headline risk event during Asia-Pac hours, although little is expected in the way of meaningful new info. A holiday in Japan will leave cash markets closed until London hours, with an ongoing holiday in China sapping further liquidity from the space.