Treasuries are slightly higher across the curve this morning from yesterday’s close. The UST10-Year yield is currently at 2.846% after closing at 2.850% prior.
Treasuries lowered overnight and into the open as trade war tensions simmered. China appeared to have toned down its stance after initially promising to take forceful actions in retaliation to the Trump Administration’s statement of imposing additional tariffs. The possibility of reengaging in further trade talks between U.S. and China sparked a rally in riskier assets, pushing Treasury yields higher as investors’ nerves settled. Treasuries have pared most of the overnight losses this morning from mixed June inflation reports.
The June CPI rose just 0.10% MoM versus an expected 0.20% increase per consensus following a 0.20% increase in May; CPIYoY is up to 2.90% from 2.80% prior. CPI excluding Food and Energy rose 0.20% MoM as expected, bringing its YoY up to 2.30% form 2.20% prior. We also received the Initial Jobless Claims for the week ended July 7 which fell 18k to 214k from a revised 232k prior, while Continuing Claims for the week ended June 30 fell 3k to 1739k from a revised 1742k prior. Later today at 10:00 AM (PT), U.S. will auction $14 Billion 30-Year Bonds Reopening. Then at 11:00 AM (PT), the June Monthly Budget Statement will be released which is expected to narrow from $146.80 Billion to $80.00 Billion in deficit.
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Treasuries lowered overnight and into the open as trade war tensions simmered. China appeared to have toned down its stance after initially promising to take forceful actions in retaliation to the Trump Administration’s statement of imposing additional tariffs. The possibility of reengaging in further trade talks between U.S. and China sparked a rally in riskier assets, pushing Treasury yields higher as investors’ nerves settled. Treasuries have pared most of the overnight losses this morning from mixed June inflation reports.
The June CPI rose just 0.10% MoM versus an expected 0.20% increase per consensus following a 0.20% increase in May; CPI YoY is up to 2.90% from 2.80% prior. CPI excluding Food and Energy rose 0.20% MoM as expected, bringing its YoY up to 2.30% form 2.20% prior. We also received the Initial Jobless Claims for the week ended July 7 which fell 18k to 214k from a revised 232k prior, while Continuing Claims for the week ended June 30 fell 3k to 1739k from a revised 1742k prior. Later today at 10:00 AM (PT), U.S. will auction $14 Billion 30-Year Bonds Reopening. Then at 11:00 AM (PT), the June Monthly Budget Statement will be released which is expected to narrow from $146.80 Billion to $80.00 Billion in deficit.
The curve has bull-flattened with the UST 10-Year yield down 0.4 bp from prior closing.