Treasury Market Outlook: Treasury yields have moved fractionally higher
Treasury Market Outlook: Treasury yields have moved fractionally higher ahead of the FOMC decision, where the markets are betting on a "dovish hike." Shorter dated rates are underperforming modestly with the 2-year up 0.6 bps to 2.65%, while the 10-year rate is up 0.2 bps at 2.82%. EGB rates have dropped with the Gilt 1.6 bps lower at 1.261% with Bund down 0.4 bps at 0.238%. The JBG finished 0.9 bps higher at 0.022%, against the grain of declines around the region. European bourses are firmer, led by better than 1% gains in peripheral markets after reports of an Italian-EU budget accord. The FTSEis also up 1%, while the DAX has rallied 0.8%. U.S. futures are bouncing too. Overnight data showed UK CPI ebbing slightly, while German PPI was higher than forecast. In the U.S., it's the FOMC today with the rate decision, but more importantly, guidance for 2019. Data includes November existing home sales, the Q4 current account and weekly oil inventory figures. The MBA reported mortgage applications fell 5.8% in the December 14 week. Today's earnings calendar features reports from General Mills and Paychex.