Futures A Touch Firmer To Start

TYZ2 deals a little above its late Friday base, -0-03 at 111-31.

• Broader weekend news flow was dominated by the continued fallout from the fiscal situation in the UK, a positive military advance for Ukraine and increased speculation re: a sizeable production cut from the OPEC+ group when it meets later this week.
• Friday saw the curve bear flatten, with the major benchmarks running 5-8bp cheaper across the curve, with 2s leading the weakness.
• Bearish pressure became evident into the bell, with a lack of month-/quarter-end support observed.
• Note that 2-/10- & 5-/30-Year yield spreads didn’t get anywhere near challenging their respective cycle troughs.
• Softer than expected MNI Chicago PMI data had helped support the space in the latter rounds of NY morning dealing, providing some counter after stronger than exp. PCE data ate away at the early Gilt-driven bid.
• Technically, the broader tone remains bearish, with bearish conditions in the TY contract reinforced and focus on the cycle peak in 10-Year yields, which lies just above 4.00%.
• Holidays in China & parts of Australia will thin out wider liquidity during Asia-Pac hours.
• Regional manufacturing PMI data presents the highlights of a light Asia-Pac docket.
• The ISM m’fing survey and Fedspeak from Williams & Bostic headline the NY docket.