Sentiment is mixed this morning as investors have a chance to react after the U.S. equity and bond markets remained closed yesterday; this marked the first time since 1888 that weather interrupted U.S. equity trading for two consecutive days. European shares extended this week’s advance, gaining an initial lift from better than anticipated earnings from Lufthansa and Air France-KLM as well as German Retail Sales data that came in ahead of expectations. Since those reports, EU bourses have come down and are now trading nearly even on the day.
Treasuries declined in overnight trading, led down by the belly of the curve (5s and 7s), after trading resumed for the first time since Monday’s half-day session. On daily charts, 2s and 5s are consolidating near mid-Oct. lows, while the rest of the curve rebounding from Monday is breaking lower. The 10yr is still testing slightly below its 50-DMA at 1.71%; support rests at the Oct. 29 low of 1.7%. Sovereign spreads to German bunds in Europe are mostly slightly higher, while the 10yr bund itself has traded down -1.5bps to a YTM of 1.46%