Treasury Market Outlook: Treasury yields are lower
Treasury Market Outlook: Treasury yields are lower, along with core European rates and most Asian sovereigns, awaiting dovish policy from central banks. But longer dated Treasuries are outperforming in quiet action, with the advent of $113 B in shorter coupon supply restraining the front end of the curve. The bond is 2.5 bps richer at 2.555%, with the 10-year 1.4 bps lower at 2.041%, while the when issued 2-year is flat at 1.810%. The Gilt is down 1.5 bps at 0.717%. The Bund is off 1.3 bps to -0.340%. The JGB finished 0.4 bps lower at -0.148%. U.S. equity futures are about 0.2% to 0.4% firmer, in line with action across most of Europe. Asian equities closed in the red, with Hong Kong 1.37% lower and the Shanghai Comp off 1.27%, while the Nikkei was down 0.23%. However, China's Star Market (like Nasdaq) saw a better than 500% surge on opening day. The trimming in Fed rate cut expectations and the drop on Wall Street on Friday weighed. Hong Kong continues to be rocked by protests. In Japan PM Abe's ruling coalition won a majority in the upper house of Parliament, which leaves some to hope that the country will soften its stance in the ongoing trade conflict with South Korea, and also keeps an October tax hike intact. The U.K. awaits Boris Johnson's succession to the PMship. Tensions remain in the Middle East. In the U.S., earnings remain front and center, though today's slate is light with attention on Halliburton and Whirlpool. Amazon, Alphabet, McDonald's, Boeing,and Starbucks are also due this week. The only data release today is the Chicago National Activity index. Supply is on tap with $113 B in shorter dated coupons, with $40 B in 2-year notes kicking off on Tuesday.