Steadying Ahead Of 5Y Supply, Potential House Debt Limit Vote

Treasuries have steadied out in overnight trade Wednesday compared with the bullish risk-off moves of the previous two sessions.

• The Tsy curve has reversed a bit of Tuesday's bull steepening overnight, with the short end underperforming. 2Y yields +3.3bp vs 10Y +0.8bp.
• Yield movements are taking their cue from equity futures, which have recovered a little from Tuesday's lows set following reports of potential First Republic Bank asset sales - helped by strong tech/cloud earnings (Microsoft, Alphabet).
• Data today includes March durable goods and trade balance (0830ET).
• Supply today includes auctions of $24B in 2Y FRNs (1130ET) and $43B 5Y Note (1300).
• On that note, reports suggest a debt limit vote in the House could come as soon as today after a very late night of wrangling over the bill; the House Republicans meet behind closed doors at 0900ET.

Current levels:

• The 2-Yr yield is up 3.3bps at 3.922%, 5-Yr is up 1.2bps at 3.4611%, 10-Yr is up 0.8bps at 3.4071%, and 30-Yr is up 0.1bps at 3.6594%.
• Jun 10-Yr futures (TY) down 3.5/32 at 115-22 (L: 115-18 / H: 115-25.5)