Treasury Action: yields are little changed and in a holding pattern
Treasury Action: yields are little changed and in a holding pattern amid political and economic uncertainties while awaiting the start of the new month and quarter, with plenty of data and Fedspeak ahead. Treasuries, still underpinned by Fed rate cut expectations (though diminished) are taking a much more cautious, circumspect stance on current conditions with impeachment, trade angst, and growth worries on the table. Equities are forging ahead, meanwhile, taking an optimistic view of trade after the U.S. claimed Friday's talk that the U.S. was contemplating restricting capital markets to China as fake news. For the month, Treasuries are about 10 bps to 20 bps cheaper, with the 10-year underperforming. The 2s-10s curve is at 5.8 bps, steeper on the day and on the month after closing at -0.48 bps on August 30, the last time it was inverted. The Dow and S&P 500 are 0.56% and 0.68% firmer on the day, respectively, and are 0.5% to 2.2% higher on the month, and 15% to 18% year to date. Trade hopes continue to underpin with high level U.S.-China negotiations set to resume October 10-11.