•Bonds marginally lower, weighed down by Bunds as they chop around
•Moderate volume, 180k 10-year futures trade by 06:39 EST
•September 10s trade 133-31/133-21.5 overnight
•Better selling from Asia in front-end, deal related receiving fives
•10s trade in a range of 1.559% and 1.584% overnight.
•USTs outperforming EGBs by 3bp in the 10yr maturity compared to the previous London close.
•The tactical bias is as a supportive range trader anticipating that sellers will be few and liquidity will be poor both ahead of the FOMC in turn favoring supportive price action.
•Look for a 1.64% to 1.54% range in 10s.
•The strategic bias is flat after exiting a 10-year long from 1.62% at 1.586% for a 3.4 bps profit. A 50% bond short from 2.675% was covered at 2.69% for a 1.5 bps profit.
•The curve bias is flat, but favors flatteners on any notable correction.
•07:45 ICSC/GS Chain Store Sales Index (wk Jun 16) (prev +2.9% y/y)
•08:30 Housing Starts (May) (mkt 720k, prev 717k)
•08:30 Building Permits (May) (mkt 728k, prev 723k)
•08:55 Redbook Same Store Sales Index (wk Jun 16) (prev +2.0% y/y)
•10:00 Job Openings and Labor Turnover Survey (Apr)
•11:00 Fed outright Treasury coupon purchase (08/15/2022 – 02/15/2031) (e: $1.50 – $2.00 bln)
•13:00 FOMC meeting, day 1
•11:30 Treasury auctions $30 bln 4-week bills