Marginally Cheaper, Fed Enter Policy Blackout Period

TYH3 deals at 114-18, marginally below levels seen in late NY trading on Friday.

• The curve twist flattened on Friday pivoting around 5s, running 4 bps cheaper to 5 bps richer at the bell.
• In the aftermath of Fridays employment data, where more jobs than forecast were added and wages surged by the most in a year, pricing for the December Fed meeting remained stable at 50bps bikes however terminal rate pricing printed a peak of 4.98% before retracing to 4.92% up 8bps from before the jobs data.
• Fed Bank of Chicago President Evans said rates will need to be raised to a higher peak even as the pace of increases slows. He echoed previous Fed communiques that rate hikes would shift to 50bps after four consecutive 75bp bikes. The Fed entered its policy blackout last Friday after these remarks.
• In Asia-Pac today we have China Caixin PMIs, further out we have PMI data from Europe and the US. There are also US Factory Orders, Durable Good Orders and ISM Services Index.