OVERNIGHT TREASURIES

•UST futures hug tight range ahead of more Fed speak, bunds ignore weak IFO
•Very light 61k Sep 10-yr notes traded as of 10.00 GMT
•USTs underperforming EGBs by 2.2bp in the 10yr maturity compared to the previous London close

MARKET BIAS

•The tactical bias is neutral looking to be supportive into the buybacks and then defensive into the auctions.
•Look for a 1.72%-to-1.64% range in 10s.
•The strategic bias is long the WI 5-year TIPS at the -1.286% auction stop, while short a 50% position in 5s at 0.671% and short a 50% position in 10s at 1.671%.
•The curve bias is in a 5s/30s flattener at 110.6 bps, but anticipates reversing into a steepener coming out of the month-end supply.

TECHNICAL OVERVIEW

DATA

•10:30 Dallas Fed Texas Manufacturing Outlook Survey (Aug) (prev -13.2)

EVENTS

•06:00 FRB Chicago’s Evans (non-voter, dove) on the economy and monetary policy; Hong Kong
•11:00 Fed outright Treasury coupon purchase (02/15/2036 – 08/15/2042) ($1.50 – $2.00 bln)
•12:15 FRB Cleveland’s Pianalto (voter, moderate) on the economy and monetary policy; Newark, OH

ISSUANCE

•11:00 Treasury announces 4-week bills (e: $40 bln)
•11:30 Treasury auctions $32 bln 3- and $28 bln 6-month bills