Treasury Market Outlook: core bond yields have continued higher
Treasury Market Outlook: core bond yields have continued higher as equities extend gains. The 2-year Treasury is up 0.6 bps to 2.565%, with the benchmark 10-year 0.7 bps higher at 2.864%. The Gilt is pacing the upswing overseas, up 3.8 bps to 1.289%, while the Bund has risen 2 bps to 0.318%. Stocks are in the green with gains of 0.1% to 0.5% in core markets, though off earlier highs. Concerns over Brexit and tariff issues continue to rattle markets, while solid U.S. growth and expectations for a strong earnings season offset. Unexpected weakness in German ZEW confidence has capped the Bund yield for now. Meanwhile, U.K. data on production, BTC retail sales, and GDP have maintained expectations for a BoE hike next month. The U.S. calendar is light. The June NFIB Small Business Optimism Index slipped to 107.2 in June after rising to 107.8 in May. Weekly chain store sales and May JOLTS job openings are also due. The Treasury auctions $33 B in new 3-year notes. There is no Fedspeak scheduled. Pepsico, the only larger-cap earnings report today, topped estimates.