Treasury Market Outlook: bond yields are sharply lower and equities are firmer
Treasury Market Outlook: bond yields are sharply lower and equities are firmer after dovish comments from Draghi and some softer Eurozone data. That hit a receptive chord ahead of the FOMC meeting. Peripherals are leading rates lower, with the Italian BTP down over 13 bps tp 2.157%. The Bund is off 6.3 bps to -0.31%, with the Gilt 5.1 bps lower 0.796%. The Treasury is keep pace with the 10-year 5.4 bps richer at 2.04%, while the 2-year is at 1.827%, down 4.1 bps. Asian yields closed slightly richer too. Stocks are flying too as the DAX has jumped 1.2%. The FTSE is 0.8% higher, while the S&P 500 is up 0.5%. ECB's Draghi said downside risks are increasing and acknowledged rate cuts and QE expansion are options, in comments from Sintra. Aussie assets were boosted by dovish RBA minutes. Meanwhile, the German ZEW sentiment survey underwhelmed and the EU trade surplus narrowed amid a plunge in exports. Also, in the UK, the pound has been rattled by signs Boris Johnson will be the new PM. The FOMC begins its 2-day meeting today and a dovish result is expected. Today's data includes May housing starts and weekly chain store sales.