Treasury Market Outlook: Treasuries are back in rally mode
Treasury Market Outlook: Treasuries are back in rally mode as stock gains seem to be running out of steam. Yields are 2 to 4 bps lower with the bond leading the decline. It's down 4 bps at 2.046%, while the 10-year is 3.7 bps lower at 1.569%, with the 2-year off 2 bps at 1.525%. The 2s-10s spread has flattened to 4 bps. The Bund has dropped 3.9 bps to -0.692% and the Gilt is 3 bps lower at 0.434%. Italian bonds are suffering though, with the BTP 3.6 bps cheaper as the government is expected to fall. The JGB finished with a 1 bp decline to -0.247%. U.S. equity futures have slipped about 0.1%, with European bourses having given up earlier gains. Chinese closed slightly lower, though the Nikkei posted a 0.55% gain. In the UK, the curve has inverted again after PM Johnson sent an official letter to EU Council President Tusk once again calling for a replacement of the controversial backstop as a pre-condition for an agreement, which the EU was quick to reject. There wasn't much data overnight and the U.S. calendar is light with just chain store sales. The Fed's Quarles will speak on community development. The earnings calendar features Alcon, Home Depot, Medtronic, and TJX.