Mid-Month Supply Eyed

A muted re-open for T-Notes, with the contract last trading unchanged at 131-28, a little off Monday's worst levels.

• The space was subjected to a much calmer round of trade on Monday, with the belly seeing some light underperformance as 5s cheapened by ~5.5bp on the day.
• Tsy Secretary Yellen re-flagged her support for sizeable fiscal stimulus and reiterated the notion that there are tools to deal with inflation if it surfaces, stressing that she doesn't expect that undesirable levels of inflation will materialise.
• A busy IG issuance slate was also noted.
• Elsewhere, the Fed extended its paycheck protection program facility through the end of June, while it confirmed that 3 other 13(3) facilities will expire at the end of March, as scheduled.
• Some steepening pressure was seen late in the day on the back of a misweighted UXYM1/WNM1 block steepener (+3,500 vs. -5,410).
• There is nothing in the way of outright tier 1 risk slated for Asia-Pac hours on Tuesday, with focus on the Treasury's mid-month auction schedule evident. 3-Year supply gets things rolling on Tuesday, and comes in the wake of an extremely poor 7-Year auction at the backend of February (which resulted in the well documented volatility witnessed on 25 Feb).