- US 2-year note auction results 3.874% vs 3.880% WI
- US August consumer confidence 103.3 vs. 100.7 expected
- Dallas Fed services sector outlook index -7.7 vs -0.1 prior
- Richmond Fed August manufacturing index -19 versus -14 expected
- US June Case-Shiller home price index +0.4% m/m vs +0.3% expected
- Fed discount rate minutes: Chicago and New York directors favored cuts
- White House: Iran is 'postured and poised' to launch an attack on Israel
- ECB's Knot: Comfortable with gradual easing
Markets:
- US 10-year yields up 1.9 bps to 3.83%
- WTI crude oil down $1.69 to $75.73
- Gold up $8 to $2524
- S&P 500 up 0.2% to 5226
- NZD leads, USD lags
Early angst in European fixed income markets spread to the US, leading to some risk aversion and a firming US dollar. One catalyst for the selling in Europe was a comment from Kier Starmer that there will be pain in the budget. Others pointed to month end but whatever the cause, it added to worries ahead of a two-year sale.
With yields substantially below last month, there were fears of a tail in the $69 billion auction. That didn't come to pass as it was bid just before the deadline and then again after a 0.6 bps stop through. That result validated the lower range in yields and idea that the Fed will be aggressive.
In turn, dollar sellers returned with a decent amount of vigour, leading to 15-25 pip moves lower in the dollar and a rebound in gold to positive territory.
Prior to that, economic data wasn't a big factor. Eyes were on the consumer confidence report and the rest of the slate but there were no big surprises.
