Global Supply Burden Applies Some Pressure

TYH4 last shows 0-10 at 111-23+, 0-01 off the base of its 0-08+ range. Cash Tsy yields across the curve are ~1bp higher on the day at typing.

• The sizeable level of global sovereign & IG duration on offer today is garnering most of the focus during early London trade, with little in the way of meaningful headline flow observed.
• This allows the NY afternoon pullback from Monday’s bests to extend.
• An uptick from yesterday’s low in crude oil futures is also noted.
• A reminder that yesterday’s rally came alongside a moderation/continued softening in some U.S. inflation metrics (New York Fed inflation expectations and the Manheim used vehicle price index), weakness in crude oil and swap spread related flows post-weekend comments from Fed’s Logan re: QT.
• FOMC-dated OIS shows ~136bp of cuts through ’24, holding comfortably off the recently witnessed dovish extremes.
• Lower tier local data is due in NY hours, with more focus set to fall on 3-Year Tsy supply. Fedspeak is due from Barr, although that will be centred on financial regulatory matters.