Prices of treasury coupon securities are virtually unchanged in overnight trading. The yield on the 2 year note has dropped 1 basis point to 2.62 percent. The yield changes on the other benchmarks are so minute as to be imperceptible so I will call them unchanged. The yield on the benchmark 5 year note is 3.36 percent. The yield on the 10 year is 4.04 percent and the yield on the Long Bond id 4.64 percent.The 2year/10 year spread is now 142 basis points.

Equity markets overseas, on balance, have posted modest gains.

Economic data released overnight ,in my view, was less than festive.

In Australia retail sales declined the most in six years as it posted a 1 percent decline.

New Zealand business confidence declined for the first time in four months as it slipped to -43 from -38.

Eurozone unemployment edged higher to 7.3 percent. Pundits and prognosticators had forecast a 7.2 percent rate.

Eurozone inflation in July was 4.1 percent year over year. That was the highest level for that series since its inception in 1197. The ECB has a target of just under 2.0 percent.

UK housing prices dropped 8.1 percent from a year ago in their largest decline since 1991.

Consumer sentiment in the UK fell to its lowest level since 1974 .

On the write down front Deutsche Bank wrote down a greater than expected $3.6 billion in bad debts and the firm’s CEO remains cautious on the remainder of the year.

There is not much else to say as the US market will take its tone from the spate of data which will be launched this morning..

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John Jansen

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