Treasury Market Outlook: bonds remain mostly weaker
Treasury Market Outlook: bonds remain mostly weaker, paced by UK Gilts where the yield is over 4 bps higher at 1.018%. The 10-year Treasury note rate is up 2 bps to 1.79%. Inflation concerns in the UK as a consequence of the recent drop in the Pound, and QE tapering worries in Europe continue to underpin the bearish trend. Cable is trading in the 1.2268 region, after having posted a bounce to 1.2325 earlier, versus a 1.2123 low, after PM May promised a parliamentary debate on the Brexit plan before beginning negotiations with the EU, though she refrained from offering a vote, and that may leave Sterling on the soft side. Meanwhile, global equities are also in the red after the 200 point drop in the Dow yesterday. Oil prices are moderately higher with WTI just shy of $51. The FOMC minutes to the September 20, 21 meeting headline today, along with supply, amid an otherwise light calendar. The Treasury is selling $24 B in new 3-year notes in the morning and $20 B in reopened 10s in the afternoon. The only data report is August JOLTS job openings. The MBA reported mortgage applications dropped 6.0% in the week ended October 7. The only notable earnings report comes from CSX.