Prices of Treasury coupon securities are either unchanged or just a tad lower in overseas trading.
The yield on the 2 year note has increased a basis point to 0.9 percent. The yield on the 3 year note has increased by a basis point to 1.47 percent. The yield on the benchmark 5 year note is unchanged at 2.37 percent. The yield on the 7 year note has climbed a basis point to 2.99 percent. Yields on the 10 year note and the 30 year note are unchanged at 3.32 percent and 4.09 percent, respectively.
The relationship between the 10 year note and the 30 year bond is unchanged at 77 basis points.
The 2year/ 10 year spread is a basis point narrower at 233 basis points.
The 2 year/5 year/30 year spread is 34 basis points.
Today is the Jewish holy day of Yom Kippur which will have many of our Jewish friends away from the financial markets as they observe that day. I expect that reduced staffing will lead to a reduction in trading volumes.
There are no economic releases scheduled for today.
In the FX market the yen posted a new cyclical high against the dollar as it touched 88.24 . Some of the gains are end of quarter repatriation ans some are motivated by comments from the Finance Minister who said that the moves were not “excessive”. He has since stated that he had been misinterperted and the yen has surrendered some of its gains.
In the UK home prices rose the most in 2 years.
While there is no economic data today, the remainder of the week will bring more than a dollop on information. There will be the monthly reading on manufacturing in Chicago as well as the national data from the ISM. There is data on consumer confidence and personal income.
We will have an opportunity to gauge business confidence in the economy with the weekly jobless claims data on Thursday.
On Friday we receive the monthly labor data.
There is no coupon supply from the Treasury but there is an announcement of supply for next week. The Treasury will be an active seller next week. There will be a 10 year TIPS auction on Monday (around $ 7 billion) . That will be followed by 3 year notes on Tuesday (around $ 40 billion) ,10 year notes on Wednesday (around $ 20 billion) and Long Bonds (around $ 12 billion) on Thursday.
I think that someone has posited that a body in motion tends to stay in motion. I expect that will be the case this week and I think the Long Bond will attempt to surge toward the 4.00 percent threshold. I have no basis for that opinion other than the very positive price action of late.