Twist Steepening Evident On Monday

T-Notes +0-05 at 133-11 in early Asia-Pac trade. The contract recovered into the bell on Monday after failing to push below 133-00 in early NY trade, with the intraday range much more confined vs. Thursday & Friday of last week. Twist steepening was evident on the curve throughout Monday's session, with the belly outperforming as 5s ended the day 3.5bp richer, while 30s were ~4.0bp cheaper.

• A heavy corporate issuance slated weighed on longer-dated swap spreads.
• Comments from Fed Governor Brainard provided a sporadic, albeit short lived, round of support for the space during the NY morning, as she noted that valuations are elevated in a number of asset classes.
• Elsewhere, 2021 FOMC voter Barkin played down any worries re: the recent uptick in longer dated Tsy yields, noting that he would be disappointed if we didn't see yields rise as the outlook improves.
• The latest ISM m'fing survey was firmer than expected.
• Elsewhere, a note from Bank of America did the rounds suggesting that the Fed should promote a twist flattening of the yield curve via "a simultaneous selling of U.S. front end Treasuries & buying of longer-dated Treasuries." They suggested that this "is the perfect policy prescription for the Fed, in our view. Twist kills 3 birds with one stone: it pulls up front end rates, it stabilizes back end rates, and it does so in a reserve neutral way that lessens bank SLR pressure to hold more capital."
• The RBA decision headlines the regional Asia-Pac docket on Tuesday, with communique surrounding the Bank's bond purchases front and centre.