Treasury Action: the market has overlooked the weaker than expected factory report
Treasury Action: the market has overlooked the weaker than expected factory report and yields are measurably higher on the day, with Wall Street moving to new highs. Increasing optimism on trade and the solid jobs report, along with signs of strong consumer and an improved housing sector are overshadowing the factory sector, where weakness has been priced in. The FOMC's latest rate cut, and the indication it's a long ways from tightening have provided underlying support to equities. Along with the rally in stocks, upcoming supply is adding to the selloff in Treasuries as the market sets up for the $84 B November refunding. When issued yields are measurably cheaper with the wi 3-year up 3.5 bps at 1.580%, while the wi 10-year is 6 bps higher at 1.770%, with the wi 30-year up 6.5 at 2.265%.