The Treasury curve bear-steepened in the overnight session following the selloff in Japanese bonds as investors reacted to the Bank of Japan’s new wider target yield range. Equity markets were mixed, with futures on both the S&P 500 and Nasdaq pointing to higher opens, while the Dow is poised to open lower in addition to selloffs experienced by European and Asian markets. The FOMC meets today and will release its rate decision later this afternoon, the market expects the central bank to keep rates unchanged.
In terms of data releases, the ADP National Employment report showed that US companies added 219,000 new employees in July coming in 33,000 higher than expected. On the housing front, the MBA Mortgage Market index showed a decline in mortgage applications of 2.6%, declining for the third consecutive week, as the impact of higher interest rates appears to have taken out some of the wind of the housing market’s sails.