Treasury Market Outlook: bonds are rallying globally
Treasury Market Outlook: bonds are rallying globally, with Treasuries leading the drop in yields as equities stumbled after disappointing Eurozone and Japanese PMI readings. The 5-year Treasury has fallen 4.2 bps to 2.361%, with the 10-year 3.8 bps richer at 2.554%, while the 2-year is 2.4 bps lower at 2.376%. The Bund is 3.6 bps lower at 0.041%, while the Gilt is down 20 bps at 1.212%. European bourses are mixed after recovering from earlier declines on the PMI reports. The DAX is now 0.4% firmer, while the FTSE is 0.06% lower. The Dow mini is off 0.1%, with the S&P future essentially flat. Japan's Nikkei closed 0.8% lower. Preliminary April manufacturing PMIs remained weak and in contactionary territory, with Japan's at 49.5, Germany at 44.5, and the Eurozone at 47.8. However, services indexes and composites were strong and in expansionary territory. Additionally, UK retail sales were stronger than expected, rising 1.1% in March. The U.S. calendar is crowded today, and the bond market is closing early ahead of Good Friday holidays. On tap are March retail sales, weekly jobless claims, the April Philly Fed index, February business inventories, March leading indicators, and flash April PMIs from Markit. The Treasury announces 2-, 5-, 7-, and 2-year FRNs, and auctions $17 B of 5-year TIPS and $85 B in 4- and 8-week bills (auction times moved up due to early close). Fedspeak has Bostic at an economic roundtable in Florida. Today's earnings feature Ally Financial, American Express, BB&T, Check Point Software, Citizens Financial, Danaher Corp., Dover Corp., Genuine Parts, Honeywell, Intuitive Surgical, KeyCorp, Philip Morris, PPG, Regions Financial, Rogers Communication, Schlumberger, SunTrust, Synchrony, Blackstone, Travelers, and Union Pacific.