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Issuance Unwinds Early, Modest Bid In Asia


T-Notes trade -0-01+ at 137-31+ last, with the contract operating within a 0-05+ range in Asia-Pac hours. The cash curve has seen some light twist steepening on the back of the aforementioned ACGB pricing in Australia, while Saudi Aramco has started marketing a $ 5-part round of issuance. This comes after light bull flattening was seen on the relatively limited downtick in e-minis during early Asia dealing, with some focus also falling on a New York Times piece which noted that "President Trump asked senior advisers in an Oval Office meeting on Thursday whether he had options to take action against Iran's main nuclear site in the coming weeks."

  • A reminder that the Moderna COVID vaccine trial news (which was flagged during Monday's Asia-Pac session) bettered last week's offering from Pfizer, resulting in further risk-on price action during Monday's early NY hours, although moves faded from extremes. T-Notes went out around mid-range, with the curve twist steepening. We heard from Fed Vice Chair Clarida, who suggested that the FOMC chose a one-year inflation memory in its new operating framework, and laid out several cases where policy makers could delay the interest-rate liftoff. While Clarida included purchases of government assets as part of the Fed's toolkit to keep inflation at desired levels, he did not indicate in his remarks whether he believed any changes in those purchases warranted changes. Asked about yield curve control, Clarida said, "I think it is still in the toolkit. Right now it is not something that we're considering." This came after J.P.Morgan shifted their Fed view. They now look for the central bank to extend the maturity of its monthly purchases of US Tsys at the December FOMC meeting.
  • Eurodollar futures sit unchanged to 1.0 tick lower through the reds.
  • Fedspeak from Chair Powell & Barkin, as well as retail sales and industrial production data provide the local highlights on Tuesday.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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