Treasury Market Outlook: bond yields are higher
Treasury Market Outlook: bond yields are higher, along with equities, as risk appetite improves. The Treasury 10-year is 2 bps higher at 3.108%, with the 2-year up 0.4 bps at 2.835%. Core yields in Europe have also gained, led by the Bund which is up 2.3 bps at 0.530%. The Gilt is 2 bps higher at 1.631%. U.S. equity futures are rebounding, with support from a rally in European bourses. The FTSE is up 0.53%, while DAX is nearly 0.5% firmer, though Italy's MIB is the leader with a 1.1% pop on budget hopes. Japan and China reopened from Monday's holiday with the Nikkei posting a 0.29% gain while the Shanghai Comp fell 0.58% amid tariff worries. Japan's services PPI rose to a 1.3% y/y pace in August, though BoJ's Kuroda said it will take longer than expected to bring inflation up to the 2% mark, but there was no market impact. The U.S. calendar is busy. The 2-day FOMC meeting begins. Data includes September consumer confidence, the July FHFA home price index, the July S&P/Case-Shiller home price index, the September Richmond Fed index, and weekly chain store sales. The Treasury auctions $38 B in 5-year notes, and $17 B in reopened 2-year FRN notes. The earnings calendar features Cintas, IHS Markit, and Nike.