Treasury Market Outlook: Treasury have recovered a bit
Treasury Market Outlook: Treasury have recovered a bit from yesterday's selloff. Yields have dropped from overnight highs and are slightly lower, even as equities are firmer. The 10-year is 1.2 bps richer at 2.125%, with the 2-year 1 bp lower at 1.853%. European bonds are underwater on spillover from the selloff in Treasuries yesterday, but have also retreated from earlier peaks. The Gilt is the exception with the yield 0.4 bps lower at 0.829%. The Bund is 1.9 bps higher at -0.212%. Stocks are modestly firmer with U.S. futures up about 0.2%, with the FTSE also 0.2% higher, while the DAX is up 0.1%. Chinese shares closed with gains of 0.4% to 06%, with the Nikkei up 0.2%. U.K. assets were helped by comments from the BoE's Vlieghe who flagged the possibility of marked rate cuts in the case of a no-deal Brexit scenario. China posted a wider trade surplus, but with declines in imports and exports. Trade tensions are still in the picture with President Trump saying yesterday China is not living up to its promises to buy agricultural products. Meanwhile, the RBA signaled that it is not in a rush to move again after cutting rates to record low. There not much on the calendar today, just June PPI. Fedspeak includes the dovish voter Evans. The markets will continue to look forward to the July 30, 31 FOMC and the expected 25 bp rate cut. Earnings season begins next week and that will be the immediate focal point.