Trump Introduces Smaller Stimuli Prospects After Ending Broader Talks

Tweets from U.S. President Trump, outlining the potential for standalone U.S. airline and PPP support packages, applied pressure to the U.S. Tsy space during Asia-Pac trade, although the move in Tsys was only modest, with the fiscal offerings from Trump reflecting proverbial pennies vs. what was being discussed in the broader talks that came to an abrupt end on Tuesday. T-Notes trade -0-02 at 138-31+ (worst levels of the day), with cash Tsys sitting unchanged to 1.6bp cheaper across the curve at typing.

• A reminder that T-Notes traded to fresh session highs late in Tuesday's NY session as U.S. President Trump pulled the rug from underneath the ongoing fiscal aid discussions, until after the November election. This flipped the momentum on the curve, with flattening moving to the fore in late NY dealing, allowing longer end yields to move back into the prevailing range witnessed over the last few months. The latest 3-Year auction saw a very modest tail, with the cover ratio and takedown metrics largely in line with the recent averages.
• Eurodollar futures sit unchanged to -1.0 through the reds, with some steepening interest seen in EDU2/U4 overnight.
• The minutes from the latest FOMC decision, in addition to addresses from Fed's Williams, Kaplan, Harker & Kashkari headline on Wednesday, ahead of the VP debate between Messrs Pence & Harris. 10-Year Tsy supply is also due.