T-Notes A Little Softer Early On

TYZ1 finished Friday's trade a touch shy of best levels, with that pullback extending a little after Monday's reopen, leaving the contract -0-06+ at 130-16.

• Tsys were happy to follow EGBs lower in early trade on Friday, with most pointing to ACGB and post-ECB dynamics, as plenty of attention fell on the embedded ECB rate hike premium now priced into markets. That was before a series of block buys across the complex (covering everything from TU out to WN) helped stabilise the space. A fresh round of weakness kicked in after U.S. PCE data met exp., while the latest MNI Chicago PMI print revealed a faster rate of expansion when compared to both prev. and exp. The space formed a base in the wake of the PCE print, with block buys of FV in the early part of the NY afternoon helping drag the space higher, before the bid accelerated into the month-end rebalancing window. The major cash Tsy benchmarks finished ~1bp cheaper to 5bp richer on the day, with 2s and 30s finding themselves at the opposite ends of the spectrum as the curve twist flattened.
• Chinese manufacturing PMI data from Caixin headlines during Asia-Pacific dealing (after the official equivalent, which is more geared towards large firms & SOEs, disappointed over the weekend), with final m'fing PMI readings from across the globe set to headline ahead of Monday's NY session. The latest ISM m'fing print will headline the domestic docket on Monday, although it will be Wednesday's FOMC meeting (where a tapering announcement is expected) and Friday's NFPs that draw the bulk of the attention this week.