Steady Re-Open After Monday's Cheapening

T-Notes last print +0-01+ at 131-13, hovering around late NY levels, a touch above Monday's lows.

• The space unwound its early bid on Monday, which was linked to the well-documented hedge fund equity position liquidation on Friday (after more details became apparent over the weekend/during early Monday trade, with talk of residual position liquidation apparent through Monday), with crude oil's relatively sharp retracement from lows (oil volatility apparent after the ship blocking the Suez Canal was refloated) also adding pressure to the space. 10s represented the weakest point on the cash curve on Monday, cheapening by a little over 3.0bp come the bell, with yields finishing higher across the curve. Cautious rhetoric from the CDC and President Biden re: the continued risks surrounded COVID did little to hamper the broader direction of travel, with equities paring most of their losses as the fallout from the Archegos liquidation appeared to be relatively contained.
• Elsewhere, a Washington Post report pointing to a potential further upsizing of fiscal support did the rounds, and likely added further pressure to the Tsy space. The piece noted that "the White House National Economic Council circulated an internal proposal calling for about $3 trillion in new spending and $1 trillion in new tax hikes, according to three people with knowledge of the matter." However, it went on to highlight that "soon enough, some members of the economic team second-guessed themselves, concerned that the plan could jeopardize the nation's long-term financial stability."
• Headline watching will be at the fore during Asia-Pac hours, with little in the way of tier 1 risk evident on the regional docket.