Treasury Prices Slightly Better in New York as Dollar Strengthens Against Majors

Treasury prices are slightly better in early New York trade with the dollar better versus the majors, though the yen is lower at 112.48. Commodities don’t seem to be bothered by the dollar strength as energy, metals and ags are in the green. Global stocks are mostly better, though some in Asia are still closed for holiday. Overnight Treasury 10Y opened Tokyo at 2.3283% and rose to 2.3355% early in London before declining to 2.323% on the New York open. Traders are eagerly awaiting the return of China and other Asian nations that have been on holiday this week.

In Asian trade, Treasuries richened on disappointing Australian retail sales. In London, sterling was in play overnight and German business group said firms must prepare for hard exit while talk swirled that revolt will see Prime Minister May out by end of year. Meanwhile, Spanish debt auctions went well despite the turmoil, with timing of Catalan secession announcement now thought to be on Monday. Overnight flows included official demand in 10Y, some Asian bank demand in 10Y and some real money interest in 2Ys. Also as noted yesterday, conditional plays for Treasury 10Y included more demand in 124 and 124.5 puts.

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