• Treasuries trade firmer, notably underperforming the rally in EGBs attributed to China considering a proposal for local governments to buy millions of unsold homes.
• Firm focus is on today’s US CPI report which lands along with retail sales for a heavy data docket.
• Cash yields sit 1.5-2bp lower, for a mild bull flattening with 2s10s at -38bps (-0.7bps) for its lowest since May 7 briefly and before that Apr 19.
• TYM4 has lifted to a high of 109-08 (+ 04+) on solid volumes approaching 300k.
• It has poked through channel top resistance and tests a key resistance at 109-09+ (May 3 high) after which lies 109-22+ (Fibo retracement of Feb 1 – Apr 25 bear leg). On the flip side, a hotter than expected CPI print could see a shift closer to support at 108-15 (May 14 low) having spiked lower in the snap reaction to surprisingly strong PPI main readings.
• Data: MBA mortgages May 10 (0700ET), CPI Apr (0830ET), Retail Sales Apr (0830ET), Empire mfg May (0830ET), Business inventories Mar (1000ET), NAHB index May (1000ET), TIC flows Mar (1600ET)
• Fedspeak: VC Barr testifies (1000ET), Kashkari fireside chat (1200ET), Gov. Bowman Blockchain Summit (1520ET)
• Bill issuance: US Tsy $60B 17W Bill auction (1130ET)

2Y yields pull further away from 5% ahead of CPISource: Bloomberg