Market Roundup: 30YY Sub-3.10%, Auction Set-ups

Tsys trading strong, little off midmorning highs on decent two-way flow. US rates took cues from German Bunds in early London trade, rally on weak ZEW current Conditions -45.8.

• Tsy futures traded sideways since extended gains slightly after the NY open. Back to last week's pre-FOMC minutes levels, 30YY below 3.10% at 3.0907% -.0837. Robust volumes (TYU2>870k) as yield curves bull flatten/extend inversion: 2s10s -2.496 at -11.015 vs. -12.018 low even after large Block buys in 2s (37.5k) and 5s (15.1k) earlier. Pre-auction short sets ahead US Tsy $33B 10Y Note auction re-open (91282CEP2) at 1300ET.
• No significant data until Wed's CPI: MoM (1.0% prior, 1.1% est); YoY (8.6%, 8.8%). However, Richmond Fed President Barkin will discuss the "recession question" at a Rotary Club of Charlotte luncheon today at 1230ET, no text but Q&A w/ audience and media.
  
• Technicals for TYU2: Treasuries have found support at 117-18, Friday’s low and the contract is trading higher. The short-term trend condition remains bullish and recent weakness is considered corrective. Key short-term support is at 116-11, the Jun 28 low. A break is required to strengthen a bearish threat and this would signal scope for a deeper retracement. On the upside, attention is on the short-term bull trigger at 120-16+, the Jul 6 high.
• Cross asset: Crude extended sell-off soft global demand report from OPEC, WTI back below 100.0 at 96.83 -7.26; Gold reversed support to 1729.85 -4.11. Equities fairly resilient: SPX emini futures ESU2 only -1.0 at 3856.0.
• Reminder: Earnings season kicks off this week, with financials and banks the early focus. Just over 5% of the S&P 500 by market cap are due to report, with the releases in focus including JP Morgan, Morgan Stanley, BNY Mellon, BlackRock, Citigroup, State Street, UnitedHealth and Wells Fargo.