US equities are looking bullish after a rough day yesterday, in which the small-cap Russell 2000 RUT sank 3.6%, its worst performance in a month and leaving the NASDAQ off over -1%, with the S&P 500 down -0.8%, with the Dow dropping -0.9%. Oil futures rose but still were short of $60 a barrel.
A bout of risk aversion supported bonds and Treasuries extended their rally this week. Virus worries and more restrictions in Europe, tensions with China, and a late tumble on Wall Street knocked rates lower, taking the 10- and 30-year maturities down over 7 bps to 1.619% and 2.33%, respectively. For the 10-year, it’s the richest rate since early last week, and for the bond since March 11. Key market movers:
- U.S. calendar has durable orders, preliminary March PMIs, Powell and Yellen speeches
- Canada calendar thin this week; Jan GDP is due next week
- EGBs down from highs, Treasuries slightly lower as European stocks pared losses
- Dollar and yen have continued to be underpinned vs other currencies on haven bid
- Eurozone Mar composite PMI lifted back into expansion territory at 52.5
- UK prelim Mar composite PMI smashed expectations, composite at 7-mth high
- UK Feb CPI much lower than expected at 0.4% y/y, down from 0.7%, core at 0.9%
Fedspeak dominates again, with Chair Powell and Secretary Yellen at a Senate panel on the Cares Act. They did not break new ground at yesterday’s House testimony. Williams, Daly, Barkin, and Evans are also on Deck. February durable orders are expected to drop -1.5% versus the prior 3.4% increase.
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Flash Markit manufacturing and services PMIs are on tap, along with weekly MBA mortgage and petroleum inventory figures. The Treasury auctions $61 bln of 5-year notes after a successful 2-year sale Tuesday.
There is also a $26 bln 2-year FRN reopening. The earnings calendar features General Mills and Paychex.