Bonds

Reasons for Treasury weakness
:

After the latest Budget, deal/debt ceiling fix US treasury announced an increase in borrowing estimates for the third quarter, up considerably versus the previous expectations (BBG). Bloomberg story goes on to say that for second year in a row the U.S. Government expects to borrow over $1 trillion .Obviously there will be an increase in Debt issuance to pay for this. Small positive is that this year is borrowing needs to be a bit less than last years. None the less more issuance =higher yields

 Probability for 50Bps rate cut are dropping  now below 10% as  Todays pending home sales and Consumer confidence do not show an economy in need of 50bps cut, Core  PCE still stagnant  which does lead to a 25 bps insurance cut, I guess. So pricing for 50 bps being unwound = treasury yields moving higher.

 Grains bothered by trump tweet regarding lack of China purchases, Weather a bit bearish for Soy and expectations that old Crop Stocks will be a bit bigger than expected as Export orders are slow. Corn -1.4% soy -1%

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