Steeper Although Softer Data Provided Some Protection

T-Notes flat at the re-open, trading just above their late NY lows to last deal -0-02 at 133-12+.

• Tsys traded steeper on Tuesday, with the long end cheapening by ~3.5bp come the bell as volume picked back up as TYZ1 became the lead contract and London returned from its elongated weekend.
• Comments from ECB hawks Holzmann & Knot knocked the space lower ahead of NY dealing, with higher than exp. Eurozone CPI readings also observed.
• A slower rate of expansion in the latest MNI Chicago PMI reading (albeit still registering at 66.8) slowed the downtick before the space started to cheapen again as we worked through NY dealing and bears forced T-Notes through technical channel support. Softer than expected consumer confidence data was also observed on Tuesday.
• Month-end price action was muted, even with larger than average projections re: index extensions in play.
• Short end flow was at the fore with a ~75K screen buyer of EDZ1 seen.
• The latest Chinese Caixin m'fing PMI survey headlines the Asia-Pac docket, with the Q2 GDP reading out of Australia also due. Looking ahead to Wednesday's NY docket, the ISM m'fing survey and ADP employment prints headline, with the latter serving as a warm up to Friday's NFP release. We will also hear from Fed's Bostic.