Treasury Market Outlook: Treasury yields extended lower
Treasury Market Outlook: Treasury yields extended lower, with the exception of the long end, continuing yesterday's rally after Fed Chair Powell's testimony where he did not push back against easing expectations. The 2-year rate has fallen another 2 bps to 1.808%. The 10-year is 0.3 bps cheaper at 2.065%. Asian bonds rallied with the JGB sliding 2 bps to -0.147%. On the other hand, EGB yields are mostly higher with the Gilt up 4.4 bps to 0.799%, while the Bund is 2.6 bps higher at -0.244%. An unexpected upward revision to German HICP weighed, while the markets doubt there will be immediate action from the ECB. Coeure played down the importance of weak headline inflation data. Also, BoE officials are reiterating the bank's reaction to a no-deal Brexit is not automatic. U.S. equity futures are firmer on the likelihood of easing with the Dow mini 0.3% firmer. The Nikkei closed with a 0.5% gain. European bourses are underperforming on the run up in EGB yields, erasing early gains in stock prices. In the U.S. today, Powell reiterates his testimony to the Senate Banking Committee. There's also Fedspeak from Williams, Bostic, and Barkin. Data features June CPI, weekly jobless claims, and the June Treasury budget. The Treasury auctions $16 B of re-opened 30-year bonds and announces 10-year TIPS.