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US TSYS SUMMARY

Treasuries are stronger though off overnight highs, ahead of 2Y supply and as Fed week gets underway.

  • Curve bull flattening: the 2-Yr yield is down 0.6bps at 0.1921%, 5-Yr is down 1.8bps at 0.694%, 10-Yr is down 2.7bps at 1.2495%, and 30-Yr is down 2.7bps at 1.8879%. Some headlines made as US 10Yr real yields touched record lows (-1.1269%).
  • Sep 10-Yr futures (TY) up 7.5/32 at 134-12 (L: 134-04.5 / H: 134-19), ~340k volume. Trading in mirror image to equity futures (S&P eminis off lows but still slightly in the red).
  • Risk-off headlines overnight centered around China, with a regulatory crackdown on education companies spurring equity weakness; note also US-China talks not particularly warm.
  • Attention of course on Wednesday's FOMC decision - MNI's preview will be out later today.
  • Data consists of Jun new home sales (1000ET) and Jul Dallas Fed manufacturing (1030ET).
  • A decent supply slate as well: combined $105B in 3-/6-month bills at 1130ET, with main event being $60B 2-Yr note auction at 1300ET. NY Fed buys ~$2.025B of 1-7.5Y TIPS.
  • The biggest week of the quarter for S&P earnings begins today, with 49% of market cap due to report - today is Tesla and Lockheed Martin.
  • Multiple reports out that US infrastructure talks are nearing a deal.
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com