Treasury prices are lower and the curve modestly steeper to start the week. Today’s move is attributable to European supply, as well as expectations for the Bank of Japan to allow long-term yields to move higher when it’s meeting concludes tomorrow. The latter would involve less purchases by the central bank, which should pressure long-end European and U.S. yields higher (all else equal). Global equity markets are mostly lower today, and S&P 500 futures are essentially unchanged. Friday’s Q2 GDP report was largely in line with expectations from a top-line growth perspective (4.1%), but the details of the report were constructive for the current quarter as well. Personal consumption and business investment were both robust, and declining business inventories actually shed 1 percentage point from the oval growth figure (positive for future productivity). This week’s economic calendar is headlined by the July jobs report (Friday), July income/spending and PCE (tomorrow), and the August FOMC meeting (Wednesday).
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