Bear Steepening As Equities Near Highs

News that Russia is rolling out a COVID vaccine helped boost already mounting risk appetite in European trading, pushing S&P futures near the all-time high and triggering mild bear steepening in the Tsy curve.

The 2-Yr yield is up 0.8bps at 0.1389%, 5-Yr is up 1.4bps at 0.25%, 10-Yr is up 2.3bps at 0.5986%, and 30-Yr is up 2bps at 1.2734%. Sep 10-Yr futures (TY) down 6/32 at 139-22 (L: 139-21.5 / H: 139-30).

In data, NFIB small biz optimism came in a little weaker than expected (98.8 v 100.5 exp, 100.6 prior) in July as uncertainty picked up. We get Jul PPI at 0830ET.

Supply picks up today: at 1300ET, Tsy sells 42-/119-day bills ($30B each), then at 1300ET, 52-Wk bills ($34B) and $48B of 3-Yr note.

We also get bill announcements at 1100ET (could see an increase in sizes but Tsy might hold off until further clarity over fiscal situation).

Fed speakers today: Richmond's Barkin at 1100ET, and SF's Daly (two appearances, at 1200ET and 1500ET).