Treasury Market Outlook: Treasuries have a slightly bearish tilt
Treasury Market Outlook: Treasuries have a slightly bearish tilt amid weakness in European sovereigns. The 2-year Treasury yields is flat at 2.222%, while the 10-year is up 0.7 bps at 2.870% in a steepening trade ahead of Fed Chairman Powell's testimony. The Bund and Gilt are underperforming overseas and the rates have increased nearly 2 bps 0.667% and 1.527%, respectively. Japan's JGB closed with a 0.40 bp slip to 0.033%. European bonds were hurt by comments from Bundesbank President Weidmann who not only repeated his hawkish calls for an end to QE, but also suggested a hike could be seen in 2019. A drop back in Eurozone ESI economic sentiment, and a dip in German state inflation that indicated a lower German HICP rate, did little for the bulls. Equities are mostly weaker, with the exception of Japan's Nikkei which closed with a 1.07% gain. European bourses were knocked back by the Weidmann comments. Attention is turning to Powell's upcoming testimony (10 ET), though the written remarks will be released at 8:30 ET. Analysts expect the Fed chief to stick to Yellen's gradualist posture. Data today includes January durable orders, the advance January goods trade report, along with January wholesales and retail inventories, February consumer confidence, the February Richmond Fed index, December FHFA home prices, the Case-Shiller December home price index, and weekly chain store sales. The earnings calendar features reports from Altice USA, American Tower, AutoZone, Bank of Montreal, Bank of Nova Scotia, Heico Corp., Sempra Energy, and Workday.