OVERNIGHT TREASURIES

•Asian banks resume buying of 5, 10 and 30-year
•London reverses early bid with modest 10-year selling
•Volumes stable during holiday season, just over 193k 10-year futures trade by 06:20 EST
•10s trade in a range of 1.771 and 1.792% overnight
•USTs underperforming EGBs by 1.2bp in the 10yr maturity compared to the previous London close

MARKET BIAS

•The tactical bias looks for opportunities on both sides of an expected 1.90% to 1.75% 10s range in the coming days.
•Look for a 1.83% to 1.74% range in 10s today.
•The strategic bias is flat but will look for a pre-POMO dip buying opportunity (2.91% on 30s) to then switch back to a strength seller.
•The curve bias is flat, but favors steepeners, especially on any notable corrective flattening.

TECHNICAL OVERVIEW

DATA

•07:00 MBA Mortgage Purchase Applications Index (wk Aug 17) (prev -2.0% w/w)
•10:00 Existing Home Sales (Jul) (mkt 4.52 mln, prev 4.37 mln)

EVENTS

•11:00 Fed outright Treasury coupon purchase (02/15/2036 – 08/15/2042) (e: $1.50 – $2.00 bln)
•14:00 FOMC minutes

ISSUANCE

•11:30 Treasury auctions $10 bln 14-day CMBs
•FHLB, $3 bln 3-year [guidance T+11 bps area]; Barc/CS/JPM/BNPP joint leadsIADB, 10-yr rumour
•BNG, possible 3 or 5-yr