OVERNIGHT TREASURIES

•Modest bid to wings, especially longer end in quiet trading overnight
•Very light volume, 50k 10-year futures trade by 06:30 EST, Tokyo closed for Marine Day
•September 10s trade 134-23/134-17.5 overnight
•Light buying front-end through sevens from Asia
•Citi Q2 earnings awaited before Wall Street open, Reuters consensus EPS at USD 0.89

MARKET BIAS

•The tactical bias is a patient dip buyer given the anticipated bounce from oversold risk markets.
•Look for a range of 1.54% to 1.46% in 10s.
•The strategic bias looks for opportunities to buy the longer ends in front of key resistance in 10s at 1.55%.
•The curve bias favors flatteners.

TECHNICAL OVERVIEW

DATA

•08:30 Empire State Mfg Survey (Jul) (mkt +4.00, prev +2.29)
•08:30 Retail Sales (Jun) (mkt +0.2% m/m, prev -0.2% m/m)
•08:30 — Retail Sales ex-Autos (Jun) (mkt 0.0% m/m, prev -0.4% m/m)
•10:00 Business Inventories (May) (mkt +0.2% m/m, prev +0.4% m/m)

EVENTS

•11:00 Fed outright Treasury coupon purchase (08/15/2022 – 02/15/2031) (e: $1.50 – $2.00 bln)

ISSUANCE

•11:00 Treasury announces 4-week bills (e: $30 bln)
•11:30 Treasury auctions $30 bln 3- and $27 bln 6-month bills