Flat Start For TY Futures After Tuesday Cheapening

A flat re-open for TYU2, which last deals -0-01+ at 119-13.

• To recap, cash Tsys were 8-11bp cheaper across the curve on Tuesday, with 7s leading the weakness, while the wings slightly lagged the move seen in the belly.
• Pre-Biden-Powell-Yellen meet pressure, in addition to a delayed reaction to Fed Governor Waller’s (usual) hawkish Monday remarks and reaction to firmer than expected German CPI data, was evident during Tuesday’s post-holiday Asia-Pac session, which was followed by a bid in early London dealing as e-minis moved lower. Firmer than expected European CPI data also aided the pressure ahead of NY dealing. Early NY trade saw IG issuance add some fresh pressure, with screen-based selling in both TY & US futures highlighted (TYU2 hit fresh session cheaps as a result). Consumer confidence and the latest MNI Chicago PMI reading were both firmer than expected, which fed into the cheapening, although the former still saw a lower print than the month prior. Still, the contract failed to breach its early NY session trough, meandering through the NY afternoon until a burst of month-end related activity late in the NY day, when a fresh round of weakness was observed, further aided by a block sale of FV futures (-8.832).
• Chinese Caixin manufacturing PMI data provides the highlight of Wednesday’s Asia-Pac docket, while NY hours will bring the ISM m’fing print, JOLTS jobs data, weekly MBA mortgage apps and the latest Fed Beige Book. Fedspeak will come from NY Fed President Williams & St. Louis Fed President Bullard (’22 voter), while the latest BoC decision will provide some interest in goings on across the border (a 50bp hike is expected by all but 1 of the 30 economists surveyed by BBG).