Treasury 2-year auction outlook: Treasury kicks off its $90 B Treasury 2-year auction outlook: Treasury kicks off its $90 B in coupon auctions with today's $26 B offering. Some concession building overnight boosted the wi 0.70%, though it's come down to 0.69% currently. The note traded as rich as 0.67% yesterday. The advent of the FOMC decision with the potential that the statement hints at a September rate hike could make for a somewhat difficult auction. Buyers could sit this one out as the outlook for Fed action has become quite uncertain. Also, the corporate calendar is heavy and is competing with the Treasury today. Historical data shows a stop here would be the highest since the 0.703% from December. The June offering stopped at 0.692% and garnered a 3.28 cover (3.42 average) with a 52.6% indirect bid (39.9% average).
China tumult will cause Fed to delay lift-off China tumult will cause Fed to delay lift-off according to a Goldman survey of investors, reported late yesterday by the WSJ Grand Central blog. Chief equity strategist Kostin was quoted accordingly: "Our recent client meetings reveal that many investors believe economic uncertainty in China will cause the Fed to delay tightening until 2016." Certainly few see any risk of a hike as early as tomorrow, though the language could possibly be updated to weight global growth risks and lower commodity prices. But, more are arguing for a deferral to 2016 thanks to fresh jitters related to Greece and China, and more importantly risk of a deeper financial correction. (subscription).
yields dipped briefly Treasury Action: yields dipped briefly following the plunge in consumer confidence in June, which marked the lowest level since September 2014. But stocks continue to churn in shallow positive territory and yields quickly stabilized again. The T-note yield probed 2.25% from 2.266% session highs after rising from 2.21% lows yesterday ahead of the 2.17% July low . The 2s-10s spread continues to steepen back out to the +160 bp area. The dollar slipped.
U.S. Consumer Confidence Preview U.S. Consumer Confidence Preview: July consumer confidence should reveal a decline to 100.0 (median 100.0) from 101.4 in June. This would come along side a decline in Michigan Sentiment to 93.3 in the first July release from 96.1 in June. The IBD/TIPP poll for the month managed to hold steady at 48.1 for a second month.