T-Notes Look Through Recent Lows, Cash Closed for Vets Day

Antipodean matters dominated headline flow during the Asia-Pac session, weakness in that region's FI space perhaps pressured T-Notes during a thinner liquidity session, with cash Tsys closed (on the back of the Veterans Day holiday), as the contract traded below the lows seen in recent sessions, last -0-03+ at 137-10+, just off worst levels, on volume of ~125K (which jumped on the break through the recent lows).

• The curve saw some light bear steepening on Tuesday, with 10s underperforming as issuance dynamics and continued optimism surrounding the COVID-19 vaccine developments were at the fore. Pricing of the latest round of 10-Year Tsy note issuance was firm enough, as the auction stopped through WI by 0.2bp, although the cover ratio was sub-par and the dealer takedown jumped. Tuesday's slew of Fedspeak generally added little new to the broader dynamic/discussion. On that front, Boston Federal Reserve President Eric Rosengren told MNI on Tuesday that he would prefer to see the Fed lengthen the average duration of its Treasuries purchases rather than increase buying, adding that more QE overall may be "advantageous" if longer rates rise amid a challenging next six months.
• Eurodollar futures run unchanged to 0.5 tick lower through the reds. J.P.Morgan issued a recommendation to sell 2.0K lots of EDZ0 at 99.760, given likely GSIB score dynamics in the wake of the recent equity market moves and current year-end turn pricing.