Slightly lower in quiet trading as equities bounce modestly, underperform Bunds

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•Slightly lower in quiet trading as equities bounce modestly, underperform Bunds
•Customer flows mixed and sporadic; Asian accounts on both sides of mkt in belly, European accounts sell 10s, Asia sells long-end
•Good volume amid dip; 198k 10-year futures trade by 06:21 EST
•September 10s trade 134-31/134-21 overnight


•The tactical bias is supportive, looking for spots to trade both sides of the market anticipating a relatively quiet pre-weekend session.
•Look for a range of 1.46% to 1.39% in 10s.
•The strategic bias is flat selling out a 50% position in 7s from 0.935% at 0.928% and covering a short in the bond from 2.48% at 2.488% for a combined 1.5 bps profit.
• The curve bias is flat after legging out of a 5s/7s steepener from 37 bps at 36 bps into the 7-year auction (selling 5s at the auction deadline and buying the 7s at auction) for a 1 bps loss.



•08:30 GDP (aQ2) (mkt +1.5% q/q AR, prev +1.9% q/q AR)
•08:30 — Core PCE Deflator (aQ2) (mkt +1.9% q/q AR, prev +2.3% q/q AR)
•08:30 — Final Sales (aQ2) (mkt +1.4% q/q AR, prev +1.8% q/q AR)
•09:55 Michigan Sentiment (fJul) (mkt 72.0, prev 72.0)


•11:00 Fed outright Treasury coupon sale (05/15/2015 – 09/30/2015) (e: $7.00 – $8.00 bln)


•No Treasury issuance activities schedule

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