5 and 7-year attract Asian buyers of dips.

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OVERNIGHT TREASURIES

•5 and 7-year attract Asian buyers of dips.
•Modest risk on bias fuels concession into calendar supply next week in 2, 5 and 7-yr.
•USTs underperforming EGBs by 3.1bp in the 10yr maturity compared to the previous London close.
•10s trade in a range of 1.990% and 2.009% overnight.
•March futures show robust volumes with 146k contracts traded by 11:30 GMT

MARKET BIAS

•The tactical bias is neutral/defensive – neutral due to diminishing liquidity (long weekend) and Greek headlines while defensive due to the rich belly into supply.
•Look for a 2.03% to 1.96% range in 10s.
•The tactical bias is flat but will look to sell 5s into strength for supply set up.
•The curve bias is flat.

TECHNICAL OVERVIEW

 

 

 

 

 

 

 

 

DATA

•08:30 CPI (Jan) (mkt +0.3% m/m, +2.9% y/y; prev 0.0% m/m, +3.0% y/y)
•08:30 Core CPI (Jan) (mkt +0.2% m/m, +2.2% y/y; prev +0.1% m/m, +2.2% y/y)
•10:00 Leading Indicators (Jan) (mkt +0.5% m/m, prev +0.4% m/m)

EVENTS

•10:15 Fed outright Treasury coupon purchase (02/28/2018 – 02/15/2020) (e: $4.25 – 5.00 bln)

ISSUANCE

•CADES, 3-yr; DB/HSBC/JPM/RBS
•EIB looking at 3-year
•EDC looking at benchmark deal

 

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