Treasury Market Outlook: yields are a little richer
Treasury Market Outlook: yields are a little richer, led by 4 bp declines in Treasuries as the bond market reopens from Monday's holiday. The 2-year is at 1.549% with the 10-year at 1.689%. Core European rates are 0.7 bps lower with Gilt at 0.626% and the Bund at -0.466%. U.S. equity futures have firmed with gains of about 0.4%, with European bourses excluding the FTSE about 0.4% to 0.6% higher, while the FTSE is down -0.3% as the stronger GDP on Brexit optimism was a drag. Brexit also managed to overshadow a weakening in U.K. labor data and the German ZEW investor sentiment index. The Nikkei returned from holiday and climbed 1.87%, while Chinese shares declined about 0.45% after CPI jumped while factory prices continued to decline. Overnight sentiment turned cautious as hopes for a quick trade deal faded with China wanting to hold more talks. Additionally there was some flight to safety on rising Mid East tensions, with concerns over the U.S. nuclear bombs at a Turkish airbase. President Trump imposed some tariffs on Turkey, and VP Pence is being dispatched to the area. Attention will be shifting to earnings today and this week. JP Morgan posted a beat, while Goldman results were disappointing. Fedspeak includes Bullard who reiterated he favors another rate cut due to low inflation. Also slated are Bostic, George, and Daly. Data is light with just the Treasury budget.