The curve is lower this morning, with the 10-year hitting a 4 week low of 2.85; as concerns around China’s financial system weighed on investor sentiment. Additionally, the recent news that the Trump administration has decided against employing the International Emergency Economic Powers Act of 1977 which would have limited Chinese investment, has investors uncertain regarding the path that the current administration intends to take with China; further spooking markets.
On the data front, durable goods orders fell 0.6% which was a smaller decline than the expected 1.0%. Business investment, which uses non-military capital goods orders excluding aircraft, fell 0.2% which was better than the expectation of a 0.5% decline. While May saw a decline, the longer term trend has been positive with core capital goods orders up 6.8% over the past year.
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