Treasury Yields Slightly Lower on Latest Trade Speculation
Market opened today’s session with treasuries slightly inched higheracross all maturities. 10-Yeartreasury yield is at 2.4476, 0.90 bp decreased from prior closing of 2.4566.
Another tweet from President Trump moved market this morning. US stock index futures briefly pared losses after President Trump tweeted that China had informed that they “are now coming to the US to make a deal”. However, the sell-off triggered by concerns over the outlook of trade war extended into a third day. Treasuries slightly edged higher as investors sought safe haven assets. As the US and China trade talks resume this week, focus will be on whether the US will follow through on threats to impose additional tariffs on Friday and whether China will retaliate. Elsewhere, the yuan fell as Chinese exports unexpectedly fell in April and WTI crude edged higher but still traded below $62 a barrel this morning. MBA Mortgage Applications index rose for the first time in five weeks by 2.70% after falling 4.30% in prior week. Both purchases and refinances increased 4.20% and 0.80% after falling 3.70% and 5.00% in prior week, respectively. Later today, the US Treasury is scheduled to auction off $27 billion of 10-year notes at 10:00 AM (PT).
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Another tweet from President Trump moved market this morning. US stock index futures briefly pared losses after President Trump tweeted that China had informed that they “are now coming to the US to make a deal”. However, the sell-off triggered by concerns over the outlook of trade war extended into a third day. Treasuries slightly edged higher as investors sought safe haven assets. As the US and China trade talks resume this week, focus will be on whether the US will follow through on threats to impose additional tariffs on Friday and whether China will retaliate. Elsewhere, the yuan fell as Chinese exports unexpectedly fell in April and WTI crude edged higher but still traded below $62 a barrel this morning. MBA Mortgage Applications index rose for the first time in five weeks by 2.70% after falling 4.30% in prior week. Both purchases and refinances increased 4.20% and 0.80% after falling 3.70% and 5.00% in prior week, respectively. Later today, the US Treasury is scheduled to auction off $27 billion of 10-year notes at 10:00 AM (PT).
The curve has bull-steepened with UST 10-Year yield down 0.90 bp.