Treasury’s posted modest gains Wednesday with the belly of the curve leading the way. Bulls were encouraged that Secretary Yellen walked back her rate hike comment from Tuesday and that there were no negative surprises from the May refunding announcement where the debt managers left the financing calendar and nominal issuance unchanged.
A late erosion on Wall Street also supported. The Biden Administration announced it would support waving intellectual property protection on covid vaccines. The belly of the Treasury curve outperformed and the 7-year rate fell 2.1 bps to 1.250%. The 10-year yield dipped to 1.578%.
Europe & Asian Markets This Morning
The DAX is currently down -0.2%, the FTSE 100 unchanged on the day, and the Euro Stoxx 50 down -0.3%. U.S. futures are still hanging on to fractional gains, with the NASDAQ future outperforming and up 0.2%. The BoE decision is coming up, but investors are also mulling earnings, rising trade friction between Australia and China while waiting for the U.S. jobs report.
For now, most central bankers continue to pledge patience on tapering and rates, but the debate on just how transitory inflation pressures will be against the background of rising commodity prices and the rebound in global growth is intensifying. European data releases this morning backed the recovery story and DAX and FTSE 100 are currently posting gains of 0.05% and 0.14% respectively, while the Euro Stoxx 50 is down -0.1%.
U.S. futures are also slightly higher, led by a 0.3% rise in the NASDAQ. Asian markets closed mixed, with Japan outperforming as markets returned from holiday. Topix and Nikkei were up 1.5% and 1.8% respectively. The Hang Seng lifted 0.8%, while CSI 300 and ASX corrected -1.2% and -0.4% amid reports that China is set to suspend the economic dialogue with Australia.
Market Forecast
Trading may be on the quiet side ahead of Friday’s jobs report. There isn’t anything on today’s slate that will alter outlooks. Data includes Weekly jobless claims that should see initial claims rise 22k to 575k, with continuing claims seen falling -60k to 3.600 mln. Preliminary Q1 productivity is expected to rebound to a 3.0% pace versus the prior -4.2% reading. April Challenger layoff figures are also on tap.
For Fedspeak, Kaplan and Mester are on deck.
Today’s earning calendar features reports from Anheuser-Busch Inbev, Square, Zoetis, Becton, Dickinson, Moderna, Regeneron, Monster Beverage, Carvana, Roku, Ambev, AIG, Canadian Natural Resources, ArcelorMittal, Motorola, Mettler-Toledo, Ball Corp., McKesson, Magna International, ViacomCBS, ConEd, Expedia, Energy Transfer, DISH Network, Kellogg, Cardinal Health, News Corp., Penn National Gaming, and Alliant Energy.
