Treasury Action: it's a slow start to the week as the markets get their footings
Treasury Action: it's a slow start to the week as the markets get their footings, and with little on today's slate to provide direction. Treasury yields are slightly higher, in tandem with European bonds, as equities rally. The 10-year Treasury and Bund yields are nearly 2 basis points higher at 2.17% and 0.293%, respectively, with the Treasury-Bund curve steady at Friday's 187 basis points, versus 196 basis points from a week ago. The Treasury curve is nearly 3 basis points narrower at 83 basis points versus last Monday. Over the near and medium term, traders will have to balance the conflicting effects of Fed policy normalization against low inflation. Fedspeak will be important and highlights this week, right on cue. NY's Dudley sounded an optimistic tone on the economy, and that pressured yields a bit higher. The dovish voter Evans speaks this evening to the Money Marketeers. Supply is light near term with just bills and TIPS due this week. The corporate calendar is expected to pick up after two slow weeks to at least $25 B, though today's slate is light so far. Traders will also closely monitor overseas developments, with an eye on the UK as Brexit talks begin.