US Tsys operated in a narrow range.....>

US TSY/RECAP: US Tsys operated in a narrow range on Tuesday, in what was a quiet

session, as the space's correlation to the US$ remained strong with little else

to trade off of.

- Cleveland Fed President Loretta Mester told MNI that she's getting a stronger

signal from inflation. And while she thinks the committee is well positioned to

react to higher inflation, she is also cognisant of the challenges of

communicating to the market how the Fed will react to more balanced risk

scenarios going forward as it moves out of its crisis-era "lower for longer"

format of forward guidance.

- Traders chalked up muted two-way chop to position squaring ahead of the Fed

Minutes, due Wednesday & the extended holiday weekend.

- The latest 2-Year Note auction stopped through screens as the bid to cover

ratio edged higher, despite the upsizing of the supply compared to the prior

auction (+$1bln), although the dealer takedown edged higher to top 45.0%.

- Corporate debt issuance remained muted, Jun/Sep Tsy futures roll accelerated.

- T-Notes last at 118.28+, US 10-Year yields closed at 3.060%.