Treasury Market Outlook: Treasury yields are little changed
Treasury Market Outlook: Treasury yields are little changed while European sovereign rates are modestly lower, even as equities remained buoyed by trade talk hopes and as it appears the U.S. will averted another government shutdown. The 10-year Treasury is down 0.4 bps to 2.68%, while the 2-year is 0.4 bps higher at 2.51%. The Bund is down 0.2 bps at 0.127% and the Gilt is 0.1 bp firmer at 1.184%. Peripherals are outperforming. Stocks have extended gains after the CSI and the Nikkei rallied 2% and 1.3%, respectively. The tone remained bullish in Europe but bourses are off their best levels and the slippage has helped bonds. Spain's IBEX is the exception after the parliament blocked the 2019 budget, which may force PM Sanchez to call for a snap election. UK CPI was weaker than expected at 1.8% y/y, as was Eurozone production, while the German 30-year auction was undersubscribed. The Swedish Riksbank and the RBNZ left policy unchanged, as forecast. In the U.S. today, January CPI is on tap, along with the delayed December Treasury budget, and weekly oli inventories. The MBA reported mortgage applications fell 3.7% in the February 8 week. Bostic and Mester speak. Earnings feature AIG, Annaly Capital Management, Barrick Gold, Cisco Systems, Hilton, Marathon Oil, and Teva Pharmaceuticals.