Flat Restart After Monday’s Modest Cheapening

TYU2 is little changed at the re-open, dealing +0-03 at 119-24, with e-minis on the defensive since settlement after a guidance cut from Walmart weighed on that name and competitors (including Amazon) during after-hours dealing.

• To recap, Tsys largely looked through equity market gyrations during Monday trade, unwinding a modest amount of the recession worry-induced richening observed at the tail end of last week, leaving the major benchmarks 4-5 cheaper on the day come the close. Wider volume in the space was sub-par.
• The Dallas and Chicago Fed activity indices were softer than expected, which doesn’t bode well for next week’s ISM print.
• A busy IG issuance slate likely aided the cheapening pressure.
• 2-Year Tsy supply stopped through WI by 0.6bp, with dealer takedown moving lower (back below its 6-auction average), while the cover ratio was little changed, hovering just below its own recent average.
• That auction, coupled with some worry re: another Nord Stream gas pipeline turbine being taken offline (a move that was telegraphed by Russian President Putin last week), allowed the space to finish off session cheaps.
• There isn’t much in the way of meaningful economic data slated for release in Asia-Pac hours. Further out, Tuesday’s NY docket will include various house price metrics, the Richmond Fed m’fing index print, Conference Board consumer confidence and 5-Year Tsy supply.