Bond Prices Little-Changed to Lower With 10-Year Auction Ahead

US Treasury prices dipped lower, reversing earlier increases seen in concert with core European bonds and Japanese government bonds (JGBs). The two-year Treasury was unchanged yielding 2.674%, with the benchmark 10-year flat at 2.973%. The UK Gilt was pacing Europe with a small 0.7 basis point dip to 1.315% while the German Bund was flat at 0.404%, and the JGB finished 0.4 bps lower at 0.098%.

Focus will be on the $26 billion 10-year Treasury auction in the wake of a weak three-year sale Tuesday. While the ongoing trade tension troubles between the US and China remain on the radar.

Stocks bounced and have erased earlier losses, with the DAX 0.34% higher, and the FTSE up 0.83%. Asian markets were mostly weaker with China’s CSI 300 tumbling 1.6% as the US carried through on the second batch of tariffs on $16 billion in goods, effective Aug. 23. That overshadowed better-than-expected trade numbers, with exports accelerating to a 12.2% year-over-year clip.

The calendar remains light with the Mortgage Bankers’ Association applications index dropping 3.0% in the week of Aug. 3. Earnings reports continue.

Treasury will release the 10-year auction results at 1 pm.

Richmond Federal Reserve President Thomas Barkin speaks in Virginia at 8:45 am with audience and media Q&As following.