A Market Driven by the 10 Year Yield
What’s in Today’s Report:
- Why This Market is Still All About the 10 Year Treasury Yield
- Weekly Market Preview: Does the 10 Year Yield Hit 1.75% or Higher?
- Weekly Economic Cheat Sheet: Flash PMIs are the Big Report This Week
Futures are little changed following a generally quiet weekend as markets digest last week’s rise in global bond yields.
The 10 year Treasury yield is actually down five basis points this morning thanks to 10% drop in the Turkish Lira after the head of the central bank was surprisingly fired. That surprise news has put a mild (but likely temporary) safety bid into U.S. Treasuries.
Regarding COVID, fears of a 3rd wave in Europe are also weighing slightly on global bond yields as some lockdowns are being extended.
Today the key events are Fed commentary, and we have multiple Fed speakers today including Powell (9:00 a.m. ET), (Barkin (10:30 a.m. ET), Daly (1:00 p.m. ET) and Quarles (1:30 p.m. ET). Bottom line, the markets want more acknowledgement of the threat of rising yields, and the hint of Operation Twist or maturity extensions in QE. As was the case last week, if they markets don’t get that from the Fed commentary today, expect the 10 year yield to creep higher from current levels (and stocks to roll over). There’s also one economic report today, Existing Home Sales (E: 6.50M), but it shouldn’t move markets.
