Treasury Market Outlook: the recovery narrative is supporting risk appetite

Treasury Market Outlook: the recovery narrative is supporting risk appetite, weakening bonds in the wake. Equities are broadly higher on improving news on vaccines and expectations for more U.S. stimulus. U.S. futures are 0.55% to 0.65% firmer, while the DAX has climbed 0.9% and the FTSE is up 0.78%. Asian shares closed solidly in the green, paced by the Hang Seng's 2.7% jump and the CIS's 1.9% gain. Treasuries leading the sell-off in bonds as the 10-yar is up over 5 bps to 1.445%. The Bund and Gilt are over 3 bps cheaper at -0.325% and 0.722%, respectively. The UK extended its furlough scheme to September. Eurozone data continue to show a strengthening manufacturing sector but weakness in services amid shutdowns. Eurozone PPI inflation picked up to unchanged from -1.1% y/y, continuing the global reflation theme. Meanwhile, China's manufacturing growth is slowing as per PMIs. Central bankers continue to use jawboning to try to tamp down rising interest rates. It is a busy U.S. session today with ADP and ISM services data. The MBA reported a 0.5% bounce in mortgage applications for the February 26 week. The Fed releases the Beige Book and there is Fedspeak from Harker, Bostic and Evens. The markets will wait for Chair Powell's remarks Thursday, however, to see if he has any new thoughts on the rise in bond yields. The earnings calendar features Snowflake, Brown Forman, Marvell Technology, Splunk, Trip.com, and Dollar Tree.