EM LATAM CREDIT: EnfraGen: New Issue Launch

Tsy futures off midmorning highs ahead of the $58B 3Y note auction (91282CNH0) at 1300ET, WI is currently at 3.975%, 15.1bp cheap to last month's stop. Auction results will be available shortly after the competitive auctions closes at 1300ET.

• May auction recap: Treasury futures pared losses slightly after $58B 3Y note auction (91282CND9) stopped through, drawing 3.824% high yield vs. 3.826% WI; 2.56x bid-to-cover vs. 2.47x prior.
• Peripheral stats see indirect take-up retreats to 62.37% vs. 73.03% prior; direct bidder take-up rises to 23.71% from 6.24% prior; primary dealer take-up 13.92% vs. 20.73% prior.

• Currency markets have traded in a more subdued fashion Tuesday, as market participants continue to await any details on developments regarding US/China trade talks, which remain ongoing in London as the European session comes to an end. As of 1730BST, the dollar index is just 0.1% green, giving back a small portion of yesterday’s decline.
• GBP if off its worst levels, but remains a standout underperformer following the softer set of UK labour market data releases. Weakness in GBP came in two phases in early trade, first on the weak payrolls data, and then again on the SONIA open, with GBPUSD briefly piercing 1.3462, its 20-day EMA. A clear break of this average would suggest potential for a deeper correction and expose the 50-day EMA for direction, at 1.3299. Cable has since recovered back above 1.35 as we approach the APAC crossover.
• EURGBP stands 0.35% higher on the day, and in the process has breached a key short-term resistance at 0.8440, the 50-day EMA. A clear break of the average is required to highlight a stronger reversal, potentially exposing 0.8541, the May 02 high.
• Dips below the 0.8400 handle have been well supported in recent months, and key support has been defined at 0.8356, the May 29 low. Clearance of this level would be required to resume the technical downtrend.
• USDJPY had some early volatility on Tuesday, as initial Ueda comments prompted the pair to trade up to 145.29 and eclipse the post-payrolls high. Spot then subsequently moved lower following some temporary weakness for equities but found solid support between 144.40/50.
• Aside from potential headlines on US/China developments, all attention now turns to the US May inflation data due Wednesday, an important pre-FOMC steer.

• US TSY TO SELL $65.000 BLN 4W BILL JUN 12, SETTLE JUN 17