Bull Flattening Amid Broader Economic Growth Concerns

Treasuries jumped in European morning trade Thursday, following the rebound from post-FOMC minutes lows and a fairly quiet Asia-Pac session.

• Curve is bull flattening: 2-Yr yield is down 0.8bps at 0.2075%, 5-Yr is down 2.1bps at 0.7475%, 10-Yr is down 3.2bps at 1.2267%, and 30-Yr is down 4.2bps at 1.8548%. Sep 10-Yr futures (TY) up 10.5/32 at 134-15 (L: 134-05.5 / H: 134-17), on elevated volume: ~450k.
• If anything, the Treasury reaction has been relatively muted when compared with the risk-off move across the board: the DXY dollar index has hit a fresh 2021 high, with equities continuing to slide (major index futures off ~0.5%).
• Some citing the FOMC minutes as the risk-off instigator, but that's not particularly clear esp given the release initially triggered Tsy weakness (and the minutes themselves were not particularly hawkish vs expectations). Other explanations include global growth/bottleneck concerns (e.g. see Toyota production cutback headlines overnight), with commodities tanking.
• Jobless claims data and Philly Fed feature at 0830ET. Jul Leading Index at 1000ET.
• In supply, we get $65B combined of 4-/8-week bills at 1130ET, with $8B 30Y TIPS at 1300ET.
• NY Fed buys ~$6.025B of 4.5-7Y TIPS.