Treasury Market Outlook: trading turned cautious overnight
Treasury Market Outlook: trading turned cautious overnight ahead of the G20 and yields have dipped lower. The 10-year Treasury is down 1.8 bps to 3.01%, with the 2-year off 0.2 bps to 2.805%, back where they were before Chairman Powell said there was a long way to go on rates (October 3). European rates have dipped lower too, with the Gilt down 2.1 bps to 1.342% and the Bund down 1.2 bps to 0.307%. U.S. equity futures have slipped alongside declines of 0.35% to 0.7% in European bourses amid Brexit and trade worries, though Asian shares were mostly higher, including a 1.1% jump in the CSI 300 on hopes for a Trump-Xi deal. That helped the index shrug off another decline in PMIs where the manufacturing index fell to 50.0. Meanwhile, Eurozone November HICP inflation softened to 2.0%, and oil prices have given up overnight gains and are back on the 50 handle. Today's U.S. calendar is thin with just the November Chicago PMI. The Fed's Williams will speak on the global economy before the G30 in NY. Note that Fed Chairman Powell will testify on the economy (Wednesday) before the JEC. It's a busy calendar next week to kick off December, and includes the November ISMs and culminates with the jobs report.