July 25, 2022 19:04 GMT
- Treasuries have more closely followed the risk-on moves implied in FX rather than falling equities, where tech companies appear to weigh on performance with Nasdaq seeing larger declines than SPX.
- Accelerated cheapening in the front-end, despite a brief pause for a solid 2Y auction stopping through 0.6bps with reasonable internals, has seen parallel shift higher in the yield curve (2YY +6.3bps, 10YY +6.6bps) from the early session bear steepening as both breakevens and real yields increase.
- That only sees a partial reversal of Friday’s rally, with yields still some 20bps below mid-last week levels before growth indicators started to roll heavily.
- Plenty of growth-related triggers tomorrow, with a heavy earnings week (50% of S&P market cap) beginning in earnest, the Richmond Fed manufacturing and Conf. Board consumer surveys plus the $46B 5Y auction.