USTs down in Asian in strong Chinese PMI

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•USTs down in Asian in strong Chinese PMI
•10-yr yields briefly above 2.25% before bouncing as bunds comes off ropes on Irish media reports that BBK to stop accepting sov paper from programme countries as collateral
•BBK deny story but USTs hold improvement off the overnight lows
•Good buying in 3-5 yr relayed from variety of Asian real money accounts.
•Fast money buy 10s on dip to 2.25%
•USTs outperforming EGBs by 0.7bp in the 10yr maturity compared to the previous London close.
•10s trade in a range of 2.243% and 2.212% overnight.


•The tactical bias is neutral/defensive, favoring the selling of strength early in the Payroll week.
•Look for a 2.25% to 2.17% range in 10s.
•The strategic bias is flat.
•The curve bias is in an old 7s/10s steepener at 62 bps and a 3s/7-year flattener at +109 bps (0.50% and 1.59%).




•10:00 Construction Spending (Feb) (mkt +0.6% m/m, prev -0.1% m/m)
•10:00 ISM Manufacturing Index (Mar) (mkt 53.0, prev 52.4)


•10:15 Fed outright Treasury coupon purchase (05/15/2020 – 02/15/2022) (e: $4.25 – 5.00 bln)
•12:35 FRB Cleveland’s Pianalto (voter, moderate) on economic stability


•11:00 Treasury announces 4-week bills (e: $30 bln)
•11:30 Treasury auctions $31 bln 3 and $29 bln 6-month bills
•FHLB global note announcement

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