Treasury Market Outlook: Treasuries are little changed
Treasury Market Outlook: Treasuries are little changed after giving up overnight gains where risk-off prevailed in Asian trading. The 2-year yield is up 0.6 bps at 1.865% after hitting 1.83% earlier, with the benchmark 10-year 0.2 bps richer at 2.03% versus 2.00%. Core European rates are mostly lower and are outperforming, with the Gilt down 2.7 bps at 0.708%. The Bund is 0.8 bps richer at -0.374%. Equities are mixed, with U.S. futures lower, along with most European bourses, after Asian stocks were weaker. China's CSI 300 underperformed dropping 2.3%, with the Nikkei off 0.98% amid escalating trade tensions between Japan and South Korea after Japan put export restrictions on specialized products needed to make semiconductors and computer displays and also threatened to remove South Korea from a list of trusted buyers. Simmering protests in Hong Kong and Erdogan's move to replace the Turkish central bank head meanwhile added to the negative risk backdrop. There's also a new Greek government with conservatives taking over. Some of the losses have been recouped in the European session, although markets remained cautious ahead of Fed Chairman Powell's testimony Wednesday and Thursday. President Trump's constant criticism of Powell is also worrisome to the markets. Today's U.S. slate has just May consumer credit. Data this week includes CPI, PPI, the NFIB small business survey, and JOLTS. There's also the FOMC minutes to the June 18, 19 policy meeting, and Fedspeak from Bullard, Evans, Williams, Kashkari, Bostic, and Barkin. Treasury supply is on tap too with $78 B in auctions.