Market Roundup: Front-Ended Tsy Supply Keeps FI Market Busy, CPI Tue

After marking session highs after the open, still mostly firmer - Tsy futures have settled in around the lower half of the range, 30Y Ultra-bonds underperforming.

• Light overall volumes (TYZ2 just over 680k after midday) with no economic data to trade off of - participants close to the sidelines ahead Tuesday's CPI read for August MoM (0.00% prior, -0.10% est); YoY (8.5% prior, 8.0% est).
• Rush of Treasury issuance next two days due to Thursday settle, maintains 2 day gap between last auction and settle: Tsy coupon sale $41B 3Y-Note (91282CFK2) in addition to $42B 26W bills closed recently; $32B 10Y notes re-open (91282CFF3) and $54B 13W bills at 1300ET (30Y Bond follows tomorrow).
• Treasury futures pare gains slightly after $41B 3Y note auction (91282CFK2) tail: 3.564% high yield vs. 3.545% WI; 2.49x bid-to-cover vs. 2.50x last month.
• Technicals for Dec 10Y currently at 115-28 (+4.5): Treasuries remain vulnerable and are trading closer to last week’s lows. The contract has recently traded breached 116-01+, 61.8% of the Jun 14 - Aug 2 rally as well as the recent 115-23 low (Sep 1). The break lower maintains a bearish theme and the price sequence of lower lows and lower highs. Sights are on 114-06, the Jun 14 low and key support. Initial firm resistance has been defined at 116-26, the Sep 2 high.
• Currently, 2-Yr yield is down 0.6bps at 3.5506%, 5-Yr is down 1.4bps at 3.4214%, 10-Yr is up 0.4bps at 3.3137%, and 30-Yr is up 1.3bps at 3.4608%.