US Treasury prices were little changed, with prices slightly higher, dipping yields with longer dated notes mildly outperforming. The 10-year yield was down near 2.941% versus a 2.942% close. The two-year was also flat at 2.707%.
Core European sovereign prices weakened modestly from earlier highs, with the German Bund yield up 1.5 basis points from Friday at 0.399% after testing 0.4119% earlier. The UK Gilt rate was 0.4 bps higher near 1.460%. The Italian note rate dropped over 10 bps to 2.92% as budget worries faded. The Japanese Government Bond closed with a 0.6 bp gain at 0.104%.
European bourses and US equity futures were climbing higher following declines in most Asian share markets, led by China and Hong Kong amid trade tensions. In overnight news, Sweden’s election was inconclusive. French industrial sentiment improved, while the UK’s trade, production, and gross domestic product reports were a mixed bag. The markets will keep a close eye on trade and tariff issues, especially after China reported a new record surplus with the US at $31.1 billion.
There’s a lot on the calendar this week with data and Federal Reserve speakers, but Treasury supply will be at the forefront (at least in terms of scheduled event risk). The corporate new-issue calendar is expected to continue to be crowded. The Treasury will auction $35 billion new three-year notes Sept. 11, $23 billion reopened 10-year notes Sept. 12 and $15 billion in reopened 30-year bonds Sept. 13. There will also be $26 billion 52-week bills Sept. 11.
Monday’s calendar is relatively light with the July consumer credit report due at 3 pm ET.
The Treasury will offer details on Tuesday’s four-week bill auction at 11 am and sell $48 billion three- and $42 billion six-month bills at 11:30 am.
Atlanta Fed President Raphael Bostic holds a “fireside chat” with a local chamber of commerce at 11:30 am followed by a Q&A.