Treasury Market Outlook: flight to safety dominated overnight
Treasury Market Outlook: flight to safety dominated overnight after North Korea tensions intensified late yesterday. President Trump promised "fire and fury" if Kim Jong Un continued to threaten, after which North Korea indicated it would attack Guam. Core bond yields are 2 to 5 bps lower, led by Gilts. The rate on the aforementioned 10-year is at 1.105%, while the Bund is at 0.432%, the lowest levels since late June, with the Treasury at 2.237%. JPY is firmer versus majors, and oil prices are in the green, while risk assets are lower with most stock markets down over 1%. It will be a nervous trade today. Earnings from Aegon, Coca-Cola Europe, Kohl's, Macy's, News Corp., NVIDIA and Perrigo will be monitored after a disappointment from Disney yesterday. The data calendar picks up with preliminary Q2 productivity and unit labor costs, June wholesale trade figures, and weekly oil inventories. The MBA reported mortgage applications rebounded 3.0% in the week ended August 4. The Treasury auctions $23 B of 10-year notes.