Reply To: Bond Traders Weekly Outlook: Two Year Rates Jump in U.S., U.K and E.U on Inflation Fears


Early Bonds:

U.S. Treasuries are set for a lower start, which will put the 3-yr note and longer tenors on track for their eighth consecutive day of losses. In Europe, where regional sovereign debt is also on the defensive while equity markets trade on a mostly lower note.

Overnight action saw the release of flash Manufacturing and Services PMI readings for May with Japan’s Manufacturing PMI returning into expansion for the first time in seven months.

In Europe, flash Manufacturing readings from Germany and the U.K. missed expectations, pointing to a deepening contraction in activity while France’s reading was ahead of estimates, but it also reflected an ongoing contraction.

Last night’s debt ceiling meeting did not yield any immediate results, but both sides are remaining optimistic.

Crude oil is building on yesterday’s gain while the U.S. Dollar Index is up 0.3% at 103.52.

2-yr: +4 bps to 4.38%
3-yr: +4 bps to 4.04%
5-yr: +3 bps to 3.80%
10-yr: +2 bps to 3.74%
30-yr: +1 bp to 3.98%