Muted In Asia After Limited Tuesday

T-Notes stuck to a 0-02+ range overnight, last dealing -0-01+ at 132-07 on light volume of ~31K, while cash Tsys are little changed to ~1.0bp cheaper across the curve. Fed Governor Waller outlined his "very positive outlook," telling BBG that "the unemployment rate would have to drop fairly substantially, or inflation would have to really continue at a very high rate, before we would take seriously a rate hike in 2022, but I'm not ruling it out." On the corporate issuance front both Softbank & Qatar Petroleum launched $-denominated multi-tranche rounds of issuance that had been flagged earlier in the week.

• To recap, Tuesday presented a limited session, with the major cash Tsy benchmarks finishing little changed to ~1.0bp richer on the day. T-Notes clung to a narrow 0-09 range. Participants await the busier slate of U.S. economic data evident in the second half of this week, which is of course headlined by the monthly NFP print. Questions surrounding the bi-partisan infrastructure proposal also continue to do the rounds. Tuesday saw Richmond Fed President Barkin note that he prefers a simple, yet flexible approach to any tapering of asset purchases, while he maintains an open mind about phasing out MBS purchases. He also added that he favours concluding tapering before raising interest rates. Elsewhere, the consumer confidence index surged, comfortably topping expectations, with the prior month's reading revised higher. There was some light pressure on the space as Salesforce launched an $8bn six-part round of issuance, although that weakness was unwound as we moved through the day, with speculation surrounding the rate locking process around the Salesforce deal evident. Steepener interest in the EDZ2/Z4 spread once again caught the eye after Morgan Stanley's recommendation to enter such a position after hours on Friday.
• Looking ahead, the MNI Chicago PMI & ADP Employment Change releases are set to provide the focal points during the NY session. We will also get Fedspeak from '21 voters Barkin & Bostic.