Non-Committal

A non-committal start to the week for U.S. Tsys, with T-Notes last +0-02 at 132-16, sticking to a 0-02+ range thus far on volume of ~55K. Futures activity was supported by the quarterly rolling process, although volume was still sub-par overnight. Participants have looked through the latest round of headlines pointing to greater regulatory oversight for commodities markets in China, with authorities flagging excessive speculation as a key driver in the recent run up in domestic commodity prices, vowing a zero tolerance policy re: monopolies operating in the space (the benchmark Chinese metal futures trade ~4-7% lower on the day at typing as a result). Yields are little changed across the cash Tsy curve.

• T-Notes finished in the middle of their daily range on Friday, with roll activity supporting volume. The cash Tsy curve twist flattened on the day, with 20s outperforming on the curve, richening by just under 2.0bp come the bell. The modest firming in the long end provided some widening impetus in longer dated swap spreads. Firmer than expected U.S. Markit PMI data was observed, while Philly Fed President Harker continued to position himself at the hawkish end of the Fed spectrum. Elsewhere, Atlanta Fed President Bostic said he has "always been in that space" when asked if he was one of the Fed policymakers who is already discussing when to taper bond buys. Still, on net, there was a lack of overt catalysts to force a break of the narrow ranges in play during the final session of the week.
• The latest Chicago Fed national activity index reading & Fedspeak from Brainard, Bostic, Mester & George are set to headline during NY hours on Monday.