Flattening Extends Overnight, Despite Impending 20-Year Supply

The flattening bias and light bid remained in the U.S. Tsy space in Asia-Pac hours, with Sino-U.S. tensions still dominating the limited headline flow. T-Notes held to a 0-02+ range, last +0-02 at 139-14+, yields sit 0.3 to 1.9bp richer across the curve.

• A reminder that the curve bull flattened on Tuesday, even ahead of Wednesday's 20-Year supply, with the USD offered and the S&P 500 hitting fresh all-time highs. T-Notes were briefly offered on the back of stronger than U.S. housing data, before recovering to re-test session highs, although the contract finished off best levels.
• Sino-U.S. tensions continued to bubble in the NY/Asia crossover. BBG noted that "the U.S. State Department is asking colleges and universities to divest from Chinese holdings in their endowments, warning schools in a letter Tuesday to get ahead of potentially more onerous measures on holding the shares." Elsewhere, Trump continued his recent line of rhetoric as we edge nearer to the Presidential election.
• Impending risk events in the form of the minutes from the latest FOMC decision and 20-Year Tsy supply (both due Wednesday) provide the focal points for the space over the next 24 hours. We will also hear from the Fed's Barkin later today.