Flat Asia Open After Paring Some OF NFP Losses

A flat re-open for TYU2, last dealing +0-00+ at 119-28 after going out a touch shy of Monday’s late NY peak.

• To recap, the Tsy curve bull flattened on Monday, rallying after the broad failure when it came to breaching Friday’s cheaps during Asia-Pac dealing, with the major cash Tsy benchmarks finishing the day 2-8bp richer.
• On net, the day seemed to simply reflect paring of some of the post-NFP cheapening, although there were a couple of sources of support that became evident throughout the session, namely a relatively sharp pullback from best levels in the equity space and swap spread tightening indicating Tsy support from receiver-side flows.
• A busy IG issuance slate (which included several financial names) helped to boost activity on what was a light volume session.
• London hours saw a bid for Bunds & Gilts lend support, although the respective cross-market spreads pared back from extremes.
• Looking ahead, there isn’t much in the way of tier 1 economic releases due during Asia-Pac hours. Further out, NFIB small business optimism and unit labour cost data headline the NY economic data docket on Tuesday, with 3-Year Tsy supply also due.