10-year yields are now down 6 bps to 4.818% as lower yields are also pinning the dollar down in European morning trade thus far. It’s a mix of moods in markets, with the Japanese yen also sliding amid a less hawkish than anticipated BOJ and then the announcement that there was no Tokyo intervention this month. Meanwhile, equities are able to claw its way back into positive territory with S&P 500 futures now up 0.2% on the day.

It’s still all to play for this week and in the case of the bond market, it’s all about the main event tomorrow. And no, it’s not the Fed.

Instead, the focus will be on the quarterly refunding announcement by the US Treasury in which they will unveil the details of their planning in terms of funding a widening budget deficit. In other words, bond traders will be looking to if they are going to step up sales of longer-term debt in relation to that. It’s all about the supply game.

This will then impact the upcoming auctions in November where we will see ones for 3-year notes (7 November), 10-year notes (8 November), and 30-year notes (9 November).

Watch this space. This is where the reverberations to broader markets will start from.

This article was written by Justin Low at www.forexlive.com.