Grinding Higher After ADP Miss, Tsy Refunding In-Line

Rates trading firmer after the bell, off late session highs amid moderate two-way positioning tending toward better buying after early post-ADP Chop. Tsy futures blipped off lows after ADP private employ came out lower than expected: +742k vs. +850k mean est.

• Rates reflexively sold off a few minutes later despite a largely in-line quarterly refunding annc from the US Tsy -- unchanged from the first quarter' record amount, $126B in 3s, 10s and 30s to auction next week. Tsy anticipates cutting T-bill auctions by USD150 billion in the months ahead and leaving longer-dated issuances steady, relying on its cash pile to fund the Biden administration's fiscal policies, as officials contend with uncertain debt limit deadlines to come at the end of July.
• Weakness was short lived as rates see-sawed higher by midday, finishing near session highs while equities pared gains, ESM1 near steady ahead the close. No obvious trigger or headline in play, amid decent overall volumes, TYM1 over 1.14M, that included sporadic buying in 5s and 10s from prop and fast$.
• The 2-Yr yield is down 0.4bps at 0.1546%, 5-Yr is down 1.8bps at 0.7997%, 10-Yr is down 1.2bps at 1.5801%, and 30-Yr is down 0.8bps at 2.2539%.