Treasury Market Outlook: Treasury yields are lower
Treasury Market Outlook: Treasury yields are lower, as are most sovereign rates around the world, even as equities extend gains. Trade tensions continue to ebb and flow, but have eased currently, but investors are taking it cautiously into the weekend. The 2-year Treasury has dipped 0.4 bps to 2.58% after testing 2.60% overnight, while the 10-year is down 0.7 bps to 2.838% from a 2.856% high overseas. Gilt and Bund yields are down 3.3 bps and 3.0 bps, respectively to 1.248% and 0.324%. The JGB closed unchanged at 0.029%. Meanwhile, stocks are modestly firmer, paced by a 1.85% climb in the Nikkei, with European bourses up about 0.5%. China has yet to detail its retaliation. It's trade surplus widened to $41.6 B in June with the 11.3% y/y gain in export better than expected. U.S. futures are pointing to a small opening gain. Expectations for strong earnings are underpinning and indeed, JP Morgan beat estimates. Citigroup, First Republic Bank, PNC Financial, and Wells Fargo are also due. U.S. data includes June import and export prices and the preliminary July University of Michigan consumer sentiment index. Of importance, the Fed releases its semi-annual Monetary Policy Report ahead of Fed Chairman Powell's testimony next Tuesday. There's also Fedspeak from Bostic, an FOMC voter.