Most Of Monday's Early Bid Unwound

T-Notes open around late NY levels, last -0-04 at 134-06+, after paring the bulk of the early Monday gains during NY hours. This came as the major U.S. equity indices recovered from their intraday lows, after opening on the heavy side owing to the geopolitical risk developments surrounding Afghanistan and softer than expected Chinese economic data. The 3 major U.S. indices actually managed to finish Monday's session in the green, with the S&P 500 (both cash and futures) registering a fresh all-time high in the process. Cash Tsys were little changed to a touch richer come the bell, with benchmark yields flat to ~1.5bp lower and 7s outperforming. Flow was headlined by an FV/WN futures flattener (-17,773 FV vs. +2,565 WN).

• The domestic docket picks up Tuesday with Retail Sales set to headline in U.S. hours. The slate will be bolstered industrial production and capital utilisation. Fedspeak will be headline by an address from Fed Chair Powell ahead of the release of the FOMC meeting minutes (due Wednesday).