Richer On Monday

TYU3 deals at 111-06, +0-01+, in line with late NY levels.

• Cash tsys finished 2-12bps richer across the major benchmarks, the short end of the curve led the bid.
• In a data-light session on Monday, a fall in used car prices which registered their biggest drop since the early days of the pandemic weighed on the USD and boosted Tsys.
• Gain moderately extended as Fedspeak leaned to the dovish side of balanced. VC Barr noted that the Fed has more work to do but is close to the end of its hiking cycle. SF Fed President Daly said risks are being less unbalanced and that the Fed is becoming more data reliant.
• FOMC dated OIS remain stable, a terminal rate of 5.40% is seen in November with ~60bps of cuts to June 2024. There is ~25bps hike priced into the July FOMC meeting.
• There is a thin data calendar in Asia-Pac today. Further out NFIB Small Business Optimism crosses as does Fedspeak from St. Louis Fed President Bullard. We also have the latest 3-Year supply.