Off Lows

Tsys have looked to European & UK bonds for direction.

• A move away from Monday lows in Bunds and some softening in lower tier UK inflation data saw Tsys rally.
• That was before firmer-than-expected Eurozone money supply data was seen.
• A fairly heavy global government bond issuance schedule also limits the rally.
• That leaves TYH4 +0-05+ at 109-25.
• The contract operates in a 0-07+ range.
• Volume runs at an above average 317K, but that is skewed higher by roll activity (which accounts for ~179K).
• Technical levels are untouched, with the bearish theme intact.
• Yields are unchanged to 1bp lower across the curve.
• Tuesday data releases include durable goods and consumer confidence, as well as a variety of house price and regional Fed activity measures.
• This week’s front-loaded Tsy coupon supply will be rounded off by 7-Year issuance later today.
• Fedspeak from Barr is also due, although that is set to focus on counterparty credit risk.