Treasury Market Outlook: bond yields have edged higher
Treasury Market Outlook: bond yields have edged higher as risk appetite rebounds. The benchmark 10-year note is leading Treasury rates with a 2.0 bp gain to 2.79%4% with the bond 1.6 bps higher at 3.03%, while the 2-year note is up 1.2 bps at 2.278%. Along with unwinding of Friday's flight to safety demand into the weekend, the set up for the $64 B in coupon supply this week is also weighing. European bonds are mixed with core yields slightly higher too with gains, though are trading around the middle of small overnight ranges. The Gilt is underperforming, up 1.2 bps to 1.40%, while the Bund is fractionally higher at 0.494%. Global equities are mostly firmer after a 1.2% climb in Hong Kong, and a 0.5% in Japan, with the DAX nearly 0.75% firmer. U.S. futures are looking at a triple digit gain in the Dow after the 2.34% dive on Friday. In overnight news, U.S. economic advisor Kudlow said the trade skirmish with China might turn out to be "benign." China is mulling currency devaluation moves to address the trade spat. A Reuters's "source" story reported North Korea is prepared to discuss denuclearization. Germany's trade surplus narrowed as exports slumped 3.2%. There is also a lot of interesting in China's Xi's speech tomorrow with hopes he may announce economic reforms and cool tensions. There's nothing on the U.S. calendar today, but it's a busy week of inflation data, Fedspeak, FOMC minutes, supply, earnings, and testimony from Facebook's Zuckerberg.