Early Bonds: U.S. Treasuries early selling lifted 10-yr yield back toward its 50dma (3.522%), 30-yr yield just 2bps below May high (3.855%)
In Europe, the EU Commission’s spring forecast raised the eurozone’s 2023 growth outlook to 1.1% from 0.9% while the outlook for 2024 was increased to 1.6% from 1.5%. The inflation outlook was raised to 5.8% from 5.6% for 2023 while the forecast for 2024 was increased to 2.8% from 2.5%.
Domestically, bank deposits decreased by $17 bln during the first week of May.
President Biden is expected to hold another meeting with Congressional leaders about the debt ceiling tomorrow.
Crude oil is rising off a ten-day low while the U.S. Dollar Index is down 0.2% at 102.50.
An ugly New York Fed Empire State Manufacturing Survey for May tamped down some of the stronger enthusiasm seen earlier. The ugliness came in the headline print of -31.8 (consensus -1.8) versus 10.8 in April. The dividing line between expansion and contraction for this survey is 0.0.
The key takeaway from the survey is that the new orders index sank 53 points to -28.0, underscoring a sharp drop off in demand in May.
2-yr +2 bps to 4.00%
3-yr UNCH at 3.67%
5-yr +2 bps to 3.47%
10-yr +4 bps to 3.50%
30-yr +6 bps to 3.84%