Refunding In Focus

Treasuries have edged lower through European trading (after a non-event Asia-Pac session) with the curve bear steepening, as equities have continued their march higher.

Sep 10-Yr futures (TY) down 3/32 at 140-07.5 (L: 140-06.5/ H: 140-13)

The 2-Yr yield is up 0.4bps at 0.1112%, 5-Yr is up 0.9bps at 0.1996%, 10-Yr is up 2.1bps at 0.5281%, and 30-Yr is up 2.8bps at 1.2136%.

Data includes ADP employment for Jul (0815ET), Jun Trade balance (0830ET), Services/Composite PMI (0945ET), and the newly-rebranded ISM Services Index for Jul (formerly the Non-Manufacturing Index - 1000ET).

Treasury's Refunding announcement at 0830ET. Seems clear we'll see a new record in issuance, and an increasing shift toward longer-end supply, though opinion somewhat split (largely given uncertainty over the fiscal stimulus outlook).

On that note, Congressional leaders meet again today following Treas Sec Mnuchin's comments late Tues re aim to get a fiscal deal this week.

No supply today due to Refunding. NY Fed buys appr $6.025B of 4.5Y-7Y Tsys.