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