Treasury Market Outlook: Treasury yields have bounced off of overnight lows
Treasury Market Outlook: Treasury yields have bounced off of overnight lows as equities extend gains. The JGB closed up 1.1 bps higher at 0.018% and is out of negative territory. European bonds are mixed with core rates unchanged to higher. The Bund is flat at 0.293%, having dipped from a 0.305% high. The Gilt has risen 1.3 bps to 1.286% but is off the 1.3018 overnight peak. Peripheral yields are lower. Meanwhile, global stocks have rallied, led by the Hang Seng's 2.27% surge, while the Nikkei finished with a 1.1% gain. U.S. futures are just over 0.2% higher, having dipped from better levels, while European bourses are up over 1%. Hopes for a trade deal at the conclusion of talks, and comments from Bullard (a voter), warning more rate hikes could lead to a recession in a WSJ interview, have supported. In overnight news, Eurozone unemployment fell to 7.9%, the German trade surplus widened while exports fell -0.4%. And there was a solid reception to the 10-year Bund auction. The U.S. data calendar is light, with just weekly oil inventory figures. The MBA reported mortgage applications jumped 23.5% in the January 4 week. The Fed releases the minutes from the December 18-19 FOMC meeting. The Treasury auctions $24 B of re-opened 10-year notes. For Fedspeak, Bostic, Evans, and Rosengren will all be speaking on the economic outlook.