Vaccine Matters Dominate

T-Notes +0-01 at 132-03+, operating around Tuesday's late NY highs.

• The space firmed on Tuesday, with the 7- to 10-Year zone outperforming, as that zone of the curve richened by ~5.0bp. Early headline flow was dominated by news that the U.S. FDA & CDC recommended pausing the use of J&J's COVID-19 vaccine in the wake of rare cases of blood clotting in women after use of the vaccine. Still, this shouldn't have much in the way of an ultimate impact on the broader pace of the U.S. vaccination schedule, with Pfizer's CEO noting that the company is on pace to complete the U.S. order of 300mn doses of its vaccine by the end of July, 2 weeks ahead of schedule. The Pfizer chief also noted that the company could provide a 10% lift in supply come the end of May vs. the original agreement. More recent headlines have noted that J&J will proactively delay the rollout of the vaccine in Europe and pause all of its COVID vaccine related clinical trials.
• Still, the impulse from Tuesday's J&J headline flow easily outweighed any impact from a marginally stronger than expected round of U.S. CPI data. Meanwhile, the latest round of 30-Year Tsy issuance stopped through WI by a little over 1.5bp, with strong internals revealing a slide in dealer participation to below average levels, while the cover ratio nudged higher.
• The Fed failed to provide any tweaks in the release of its Tsy purchase schedule, which saw 20s cheapen by a little over 2bp on the 10-/20-/30-Year fly come the close after last week's comments from SOMA chief Logan flagged the potential for an increase ("minor technical adjustments") in 20-Year purchases over the coming months.