Yields Lower After Extended Weekend, Deal Passage & Employment Data The Focus

TYU3 opened trading at 114-01, unchanged from NY closing levels, after jumping +27 since Friday's close.

• Following the extended holiday weekend, cash tsy yields finished NY trading, registering declines of 7-12bp across major benchmarks. Investors were carefully assessing the consequences of the bipartisan agreement, which was announced on Saturday, and entails the suspension of the debt limit for the upcoming two years.
• Getting the deal to pass through a fractious Congress before the June 5 "X" date is the real challenge.
• The move lower in US tsy yields was supported by the Conference Board measure of US consumer confidence, which fell to a six-month low of 102.3, and weaker CPI data out of the Euro area.
• The attention now shifts towards crucial employment data scheduled for release later this week. The ADP private employment data, typically released on Wednesday, will be published on Thursday due to the holiday. The May non-farm payrolls (NFP) report will be unveiled on Friday, with the current median estimate projecting a gain of +190,000 jobs for May compared to the previous figure of +253,000.
• Fed enters policy blackout at midnight Friday.