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Treasury Market Outlook: bonds have caught a bid.

Treasury Market Outlook: bonds have caught a bid in European action after a renewed drop in the German Ifo business confidence index added to expectations for ECB stimulus, while geopolitical tensions remain high. The Gilt has led the decline in rates, down 4 bps to 0.802%, with the Bund 2.6 bps lower at -0.314%, with the Treasury note also 2.4 bps richer at 2.03%. The JGB closed 0.5 bps higher at -0.162%. Equities are mixed. Asian shares posted gains into the close, while the weakening in the German Ifo has weighed on European bourses with the DAX having dropped 0.7%. U.S. futures are fractionally firmer. The markets are likely to remain nervous amid Iranian tensions and ahead of the G20 at the end of the week. Today's U.S. agenda is light includes just the the June Dallas Fed index and the May Chicago Fed national activity index. Neither are market movers. There is no Fedspeak scheduled though there's a heavy slate of speakers on Tuesday, including Chair Powell. Treasury supply is heavy with the $113 B in shorter dated coupon auctions starting on Tuesday. Economic data picks up later in the week, with consumer confidence, new home sales, durables, advance goods trade, revised Q1 GDP, jobless claims, and personal income and PCE.

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Publication:The Fly
Date:Jun 24, 2019
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