Round Tripping

A muted re-open for T-Notes with the contract last +0-01+ at 137-26.

• To recap, T-Notes corrected from best levels as we moved through NY trade on Monday, leaving the contract little changed on the day as it closed just off session lows. There was little in the way of overt drivers for the reversal, but the impending passage of the U.S. fiscal support scheme and assurances from leading health bodies that the new COVID-19 mutation seen in the UK wasn't a gamechanger for vaccine efficacy likely took the edge off of things. The curve flattened on the day, but 30s were less than 2.0bp richer come the bell.
• The latest 20-Year Tsy auction was solid enough, stopping through WI by 0.8bp, while the cover ratio was in line with the recent average, with dealer takedown just a touch above the recent norm.
• On the flow side, a 50K buyer of the 1x2 TYG1 138.00/137.00 put spread provided the highlight late in the day.
• Little of note on the docket in Asia-Pac hours, so broader headline flow will be eyed.