China devalue of the yuan is seen, initially, as stealing growth. The largest devaluation of the yaun in two decades sparked overnight concern that any gains made in China as a result of this action would be more than offset by the losses elsewhere.
Eurodollar and Treasury futures are slightly higher in early trade on Thursday, August 6 with the Eurodollar futures yield curve basically shifted 1-2 bp lower and the Treasury curve too with movement of a similar magnitude.
The Treasury 30-year yield is slightly higher to 2.87% after trading to a 3 month low of 2.84 yesterday. The chart below shows support toward these levels as old high yield levels of 2.84% and 2.85% were reached in March and December ’14 respectively.
Eurodollar futures are lower and the Eurodollar futures yield curve is steeper throughout the first two years following slightly lower than expected Q2 GDP report that included a positive revision to Q1 and the previously noted jump in PCE.