Treasury Market Outlook: Treasury yields have jumped higher Treasury Market Outlook: Treasury yields have jumped higher, in tandem with weakness in global bonds. The Treasury 10-year is up over 4 bps to 2.38%, though U.K. Gilts are underperforming with the yield up 5 bps to 2.43%. There was some unwinding of safe-have flows from Friday. Japanese accounts were noted sellers. Trading volume was large to open September. Equities are higher with Japan's Nikkei leading the way with a 1.24% surge. Overseas data were mixed with a strong U.K construction reading and a decline in Eurozone PPI to -1.1%. It's a busy week of data and events globally, with all eyes on the ECB meeting Thursday with expectations for more stimulus. In the U.S. the key report is the August employment release (Friday). Today's slate includes the August ISM manufacturing index and construction spending for July. Also of interest this week is the Fed's Beige Book for the September 16, 17 FOMC (Wednesday).
FX Action: USD-JPY took out option barriers at 105.00 FX Action: USD-JPY took out option barriers at 105.00 in extending to a fresh eight-month peak of 105.01. January's major-trend peak at 105.44 is now in scope. The move reflects general dollar outperformance along with yen underperformance, with the Japanese currency declining on the view that the BoJ is heading for fresh monetary stimulus to counter the impact of the sales tax hike. EUR-JPY hit nine-day highs earlier while AUD-JPY logged a new 16-month peak during the Tokyo session today. USD-JPY support is now marked at 104.27-30, ahead of 104.00.