Modest Bear Steepening With FOMC Speakers, Housing Data Ahead

The US curve has bear steepened Tuesday following the resumption of cash trade.

• With little in the way of impactful newsflow over the weekend, Tsy futures were dragged down Monday by bearish developments in Europe centered on a sell-off in UK rates ahead of the Bank of England meeting Thursday.
• Some of Monday's weakness has been unwound - alongside a bounce in Bunds and Gilts, and helped by dovish RBA minutes overnight - but Tsys remain cheaper this week by a few ticks.
• Attention turns to housing starts/building permits data (0830ET) following Monday's NAHB homebuilder sentiment reading that suggested a rebound in housing market activity may be underway. We also get Philly Fed non-manufacturing (also 0830ET).
• We hear from FOMC's Bullard, Williams, and Barr today, but focus this week is on Chair Powell's 2 days of congressional appearances, starting tomorrow.
• Supply consists of more chunky bill auctions: $50B 6-week CMB and $65B 13W/$58B 26W sales (unch from prior). We also get sizes for this week's 4/8/17W auctions at 1100ET.

• The 2-Yr yield is up 0.7bps at 4.7211%, 5-Yr is up 1.4bps at 3.9972%, 10-Yr is up 2.5bps at 3.7867%, and 30-Yr is up 2.7bps at 3.8796%.
• Sep 10-Yr futures (TY) down 3/32 at 112-30.5 (L: 112-23 / H: 113-7.5)