US Treasuries took a beating last Thursday ahead of the Easter, and the curve steepened, as economic data (initial jobless claims, the Philadelphia Fed manufacturing index) impressed. The 10-year yield surged by some 9bp. Also German yields rose, but the moves were smaller. Yesterday’s trading in US Treasuries did not lead to big moves.
The more bearish sentiment will be tested today, and after a negative opening for German bonds, demand is likely to resurface and support bonds, while US yields are set to edge lower.
US equities advanced yesterday, with S&P 500 up by 0.38%, and the index has now recouped most of the losses seen earlier this month. Asian equities are trading mixed this morning, but Europe will open higher.
US existing home sales out today – Euro-zone flash PMIs later
This week’s calendar does not look particularly heavy, but the Euro-zone April flash PMIs tomorrow will be interesting, and a setback looks likely. China’s flash manufacturing PMI tomorrow will also gather attention.
In addition, corporate earnings reports will continue flowing in. E.g. 151 S&P 500 companies are due to report during the rest of the week.
In today’s calendar, the US FHFA house price index for February will be released at 15:00 CET, while US March existing home sales and Euro-zone consumer confidence will have their turn at 16:00 CET. The former Fed Chairman Bernanke will speak at 17:45 CET.
A flood of auctions on the agenda already today – Portugal to make a return to auctions
A busy auction calendar lies ahead. All the action will start today with Dutch, Belgian and US auctions. The Netherlands will re-open its 3-year benchmark for EUR 2 to 3bn, Belgium will sell bonds maturing in 2019, 2024 and 2035 for a combined EUR 2 to 2.5bn, while USD 32bn of 2-year notes will be offered in the US.
Later in the week, Portugal will resume its bond auctions on Wednesday with a EUR 0.5 to 0.75bn re-opening on its 10-year bond. The US will sell USD 35bn of 5-year notes, while Spain will auction 2017, 2019 and 2024 bonds and Italy linkers for EUR 1.5 to 3bn and zero-coupon bonds for EUR 3 to 3.5bn on the same day. Finally, USD 29bn of 7-year notes will be offered on Thursday.
Coupon and redemption payments from French bonds total almost EUR 40bn this week, which should boost French bonds.
Nordea