OVERNIGHT TREASURIES

•Treasuries back off early highs after marginal strength emerges from eurozone data
•Volumes show slight improvement in holiday season, just over 107k 10-year futures trade by 06:20 EST
•Asian accounts lift 10s on dips but flow light
•10s trade in a range of 1.678% and 1.661% overnight.
•USTs underperforming EGBs by 0.8bp in the 10yr maturity compared to the previous London close

MARKET BIAS

•The tactical bias is supportive , but patient to buy dips in the range
•Look for a range in 10s of 1.68%-to-1.61% in 10s
•The strategic bias is flat
•The curve bias is in a 5s/30s flattener at 207.6 bps looking to take profits at 202.6 bps

TECHNICAL OVERVIEW

DATA

•07:30 NFIB Small Business Optimism Index (Jul) (prev 91.4)
•07:45 ICSC/GS Chain Store Sales Index (wk Aug 11) (prev +2.4% y/y)
•08:30 PPI (Jul) (mkt +0.2% m/m, +0.5% y/y; prev +0.1% m/m, +0.7% y/y)
•08:30 Core PPI (Jul) (mkt +0.2% m/m, +2.3% y/y; prev +0.2% m/m, +2.6% y/y)
•08:30 Retail Sales (Jul) (mkt +0.3% m/m, prev -0.5% m/m)
•08:30 Retail Sales ex-Autos (Jul) (mkt +0.4% m/m, prev -0.4% m/m)
•08:55 Redbook Same Store Sales Index (wk Aug 11) (prev +2.0% y/y)
•10:00 Business Inventories (Jun) (mkt +0.2% m/m, prev +0.3% m/m)
•10:00 IBD/TIPP Economic Optimism Index (Aug) (prev 47.0)

EVENTS

•11:00 Fed outright Treasury coupon purchase (08/15/2020 – 05/15/2022) (e: $4.50 – $5.50 bln)

ISSUANCE

•Fannie Mae benchmark note announcement
•11:30 Treasury auctions $40 bln 4-week bills and $25 bln 15-day CMBs
•BP, 5-yr benchmark; RBS/UBS, m/s +75bp area