Likely Split Congress Does Little For Tsys

A contained round of Asia-Pac dealing leaves cash Tsys running little changed to 1.5bp cheaper across the curve into London trade, with intermediates leading the modest downtick observed across most of the curve. TYZ2 prints -0-03 at 110-06, around the middle of its 0-08+ overnight range, with volume running at a healthy ~98K.

• The latest indications point to a split Congress when all is said and done with the Midterms, with the most likely outcome seeing the Republican Party re-take the House, while the Democrats are expected to maintain control of the Senate.
• Early indications of a strong Republican showing weren’t followed through on a national level, allowing the Tsy space to tick away from early session cheaps.
• A downtick for e-minis has also provided support for the space.
• Note that a split Congress would likely bring worry surrounding fiscal impasse (read the debt ceiling and government shutdowns) to the fore, given the nature of the relatively hardline Republican House leadership.
• Looking ahead, Fedspeak from Williams and Barkin, in addition to 10-Year Tsy supply, will provide the highlights outside of the ongoing Midterm vote counts.