Treasury Market Outlook: event risk turned trading cautious overnight
Treasury Market Outlook: event risk turned trading cautious overnight ahead of the U.S. midterm elections. Treasuries have a modest bid with the the when issued 10-year yield 1 bp lower at 3.195%. The 2-year is off 0.8 bps to 2.899%. The Bund has dipped 1 bp to 0.404%, but the Gilt is 1.7 bps higher at 1.514%. Italy is again the underperformer with the rate 8 bps higher at 3.40%. The JGB closed fractionally higher at 0.119%. Meanwhile, U.S. equity futures are about 0.2% lower, along with the DAX. The MIB and FTSE are about 0.7% weaker on respective budget and Brexit issues. In Asia, the Nikkei rallied over 1%, while China's CSI closed with a 0.6% loss. Eurozone Finance Ministers backed the Commission's call for a revision of Italy's budget plans. Overnight events showed the RBA on hold, while German manufacturing orders were stronger than expected, while Eurozone services PMI was revised higher, and U.K. BRC retail sales rose 0.1%. In the U.S. today, it's all about the elections. Data includes just weekly chain store sales and September JOLTS. The Treasury auctions $27 B of 10-year notes, along with $50 B in 4-week bills, $30 B in 8-week bills, and $26 B in 52-week bills.