Treasury Market Outlook: core bonds and stocks are mostly cheaper
Treasury Market Outlook: core bonds and stocks are mostly cheaper, with the exception of the FTSE and the Nikkei. Trading remained cautious overnight ahead of Fed Chair Powell's testimony tomorrow. Treasuries are also seeing some concession building ahead of supply. The 2-year note is up 1.5 bps at 1.90%, with the wi 3-year 2.5 bps cheaper at 1.875%, while the wi 10-year is 1.5 bps higher at 2.065%. Stocks have declined overnight, with the DAX leading the drop, down 0.9%. The CSI 300 finished with a 0.25% loss, while the Nikkei closed 0.14% firmer. The FTSE is fractionally in the green, while U.S. futures have sold off modestly. There wasn't a lot of news overnight. A profit warning from BASF weigh on the pound, though that supported U.K. stocks and bonds which outperformed. Yesterday's broker warning on Apple hit tech stocks, with Japan's Topix falling -0.22%. Weaker than expected UK BRC retail sales and a slump in Italian retail sales highlighted downside risks and are expected to keep central banks on course for further easing, even if the cuts may not quite as deep as investors initially priced in. Escalating tensions between the U.S. and Iran are also keeping the markets wary. Today's calendar is thin with just the $38 B 3-year note sale. Data includes May JOLTS and weekly chain store sales. The June NFIB small business outlook survey fell to 103.3. The The dovish dissenter Bullard gives opening remarks at a monetary and financial institutions forum. Bostic will be speaking there late in the day.