Treasuries dealer commentary says if the GOP tax plan is revealed on Monday, the markets will take their cue from that. While there was some Asian real money demand in 10Y at 2.27% earlier this week, now dealer commentary says demand now centers on 2.30%. They that add a deficit funded plan, which could get support, should be negative for the back end and might cause post Fed and supply flatteners to unwind quickly driving longer dated yields higher.

As for North Korea, a government official said an H-Bomb in the pacific is a “game changer,” but they assigned a low probability for that happening. That said, any aggressive North Korean action short of that should provide opportunity to sell the market, if it moves at all. However, they would wait to fade a move to see how US reacts if NK actually tests an H-bomb in the Pacific.

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