Treasury Market Outlook: yields richened overnight
Treasury Market Outlook: yields richened overnight, led by the Gilt after the UK Parliament rejected PM Johnson's program bill to fast track the ratification of the EU withdrawal legislation; that would have been needed for Brexit to happen by the end of the month. Also, weakness in equities is adding to the bid in bonds. The Gilt is 4.5 bps richer at 0.662%, but was as low as 0.648%. The Bund is down 3.9 bps to -0.441%, with the 10-year Treasury 3 bps lower at 1.73%. The JGB closed down 1 bp at -0.154% as the market reopened. Stocks are mixed, with U.S. futures off about 0.2% after earnings misses from Caterpillar and Texas Instruments (Boeing just reported weaker earnings too), while core European bourses are slightly higher with the FTSE up 0.23% and the DAX 0.04% firmer. Chinese shares were lower with the Shanghai down 0.4%, even though the PBOC slashed the rate for the onshore yuan and injected further liquidity. The Hang Seng fell after the FT reported China is preparing to replace Hong Kong CEO Carrie Lam. The Nikkei was 0.3% higher on a catch-up trade. In the U.S. today the calendar includes more earnings, auctions of 5-year notes and a 2-year FRN, and the August FHFA home price index, and weekly oil inventories. The MBA reported mortgage applications dropped 11.9% in the October 18 week.