Fresh Cheapening As Europe Filters In

Tsys are dragged lower by fresh cheapening momentum in EGBs around the old Eurex open, allowing TYU3 to take out its Asia-Pac base, extending its move through Friday’s low. Cash Tsys are 3.0-5.5bp cheaper.

• EGB catch up to Friday’s late NY move, coupled with reaction to the overnight bid in crude oil futures post-OPEC+ (which has faded from extremes) are driving things, allowing the space to extend on Asia-Pac weakness.
• All of the major yield benchmarks have breached their Friday highs.
• Overnight flow was dominated by a 2.5K block seller in FV futures.
• The ISM services survey presents the highlight of the NY docket.
• The Fed went into its pre-meeting blackout over the weekend. An appearance from Cleveland Fed President Mester is seen on some calendars covering today. She is slated to deliver “brief welcome remarks” at the Council for Economic Education’s National Personal Finance Challenge. There will be no text and no Q&A. Therefore, don’t expect her to provide much in the way of market-pertinent communique.
• Bill issuance will also be eyed as the Tsy looks to restock its TGA in the coming weeks/months. Many have warned of the impact on wider market liquidity that this could/will have, although that hasn’t done much to de-rail the recent rally in equities.