OVERNIGHT TREASURIES

•Bonds modestly lower amid very choppy trading
•Moderately light 132k 10-year futures trade by 06:34 EST
•June 10s trade 129-05/128-30 overnight
•USTs underperforming EGBs by 2.2bp in the 10yr maturity compared to the previous London close.
•10s trade in a range of 2.241% and 2.264% overnight.

MARKET BIAS

•The tactical bias is neutral, buying both dips and selling strength.
•Look for a 2.30% to 2.23% range in 10s.
•The strategic bias is flat, and anticipates looking to come out of the 7-year auction with a long.
•The curve bias is in a 7s/10s steepener at 62 bps.

TECHNICAL OVERVIEW

DATA

•07:45 ICSC/GS Chain Store Sales Index (wk Mar 24) (prev +3.3% y/y)
•08:55 Redbook Same Store Sales Index (wk Mar 24) (prev +3.6% y/y)
•09:00 S&P/Case-Shiller Index (Jan) (mkt -3.8% y/y, prev -4.0% y/y)
•10:00 Consumer Confidence (Mar) (mkt 70.3, prev 70.8)
•10:00 Richmond Fed Manufacturing Survey (Mar) (prev +20)
•10:00 Richmond Fed Services Survey (Mar) (prev +6 revenues)

EVENTS

•10:15 Fed outright Treasury coupon purchase (02/15/2036 – 02/15/2042) (e: $1.75 – 2.25 bln)
•12:35 FRB Boston’s Rosengren (non-voter, dove) to speak; London
•12:45 Fed Chair Bernanke (voter, dove) to lecture on “The Federal Reserve’s Response to the Financial Crisis and the Great Recession”; GWU
•13:20 FRB Dallas’s Fisher (non-voter, hawk) on “Federal Reserve Operations and Economic Update”; Choudrant, LA
•15:45 Fed Governor Duke (voter, dove) on “Building Sustainable Communities”; Seattle, WA
•21:00 FRB St. Louis’s Bullard (non-voter, hawk) at Global Monetary Policy Conference; Beijing

ISSUANCE

•11:30 Treasury auctions $35 bln 4-week bills
•13:00 Treasury auctions $35 bln 2-year notes
•EIB, $3bn 3-yr; BC/BNPP/JPM; m/s +33bp area