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Tick Higher On Monday, EGB Rally Spills Over

US TSYS

TYZ3 deals at 108-31, -0-01, in line with late NY levels.

  • Cash tsys finished 6-8bps richer across the major benchmarks, the belly marginally outperformed.
  • A rally in EGBs spilled over adding support to the wider space, no net German debt issuance and ECB Chief Lagarde looking at PEPP reinvestments were the catalysts.
  • Softer than expected New Home Sales and Dallas Fed Mfg added to the richening impulse in NY.
  • The space was briefly pressured after the latest 2-Year Auction tailed, however the downtick was short lived and gains continued to extend after the 5-Year Auction showed improving, albeit below average, demand compared to the October auction.
  • In Asia today there are a number of central bank speakers including RBA’s Gov Bullock ECB's de Cos and BOE’s Ramsden.
  • Further out we have US Conference Board consumer confidence, Richmond Fed Mfg and Business Conditions and Dallas Fed Services. The latest 7-Year supply is due, as is Fedspeak from Fed Governor Waller and Chicago Fed President Goolsbee.

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