Treasury Market Outlook: Treasury yields dropped overnight
Treasury Market Outlook: Treasury yields dropped overnight, but are off earlier lows amid swings in equities. Rates are down 2.5 bps, leaving the 2-year yield at 2.08% versus 2.066% in European action. The 10-year yield is at 2.775% versus 2.756%. European yields are mixed with peripherals down over 7 bps, while Bunds and Gilts have moved up into the red. The JGB finished modestly in the green, along with most Asian sovereigns. U.S. equity futures are weaker and suggest about a 150 point opening decline, while European bourses are about 0.5% to 0.8% firmer. Overnight news showed the RBI leaving policy unchanged. German industrial production and U.K. house prices fell. Germany's Bund auction saw strong demand amid rising refinancing costs. The Fed's Kaplan, speaking from Frankfurt, said stock market corrections are healthy. Fedspeak highlights today's slate and includes Fed VC Dudley (voter), Evans (not a voter) and Williams (voter) after the close. The Treasury auctions $24 B in 10-year notes. It's another packed earnings slate. Data includes December consumer credit, weekly oil inventories, and revised CPI. The MBA reported mortgage applications edged up 0.7% in the February 2 week.