Treasury Market Outlook: bond yields extended lower overnight
Treasury Market Outlook: bond yields extended lower overnight, while equities have been mixed after new record highs on the S&P 500 and NASDAQ Tuesday. Gilts are leading the rally in bonds with the yield 4 bps lower at 1.184%. The Bund is 3.6 bps lower at 0.003%, and the 10-year Treasury note is down 2.7 bps to 2.538%. And unexpected drop in the April German Ifo confidence index to 99.2 from 99.7 and a slide in French business confidence (manufacturing). Meanwhile, there was strong demand in the German 10-year sale. Italian BTPs were under pressure earlier on reports of tensions in the coalition government ahead of S&P Ratings review later this week, though rates have been dragged lower by the rally across the region. Equities are trading cautiously, with the Dow future slightly firmer, and the S&P 500 slightly weaker. The DAX has jumped over 0.8%, overlooking the confidence data, with support on reports that Japan's SoftBank Group plans to invest about EUR 900 million in Wirecard. Chinese shares finished modestly higher, but reports of a slowdown in stimulus are limiting the upside. Australia's ASX jumped over 1% intraday after weak inflation data boosted speculation of an RBA rate cut. In the U.S. today, earnings will remain a focal point (Boeing just reported a miss and suspended its outlook), while as this is the busiest week of the season. Treasury auctions $41 B of 5-year notes and $20 B of 2-year FRNs. Data includes the MBA mortgage market index, which dropped 7.3% in the April 19 week. Oil inventories are also due.