U.S. Treasuries started little changed to lower, having relinquished earlier gains. The yield on the 10-year Treasury traded around 1.66% before testing 1.699% and has since backed off. Bund and Gilt yields were 2 basis points higher at -0.038% and 0.797%, respectively, from -0.067% and 0.760% earlier. European bourses were lower, but off the worst levels, while U.S. futures edged higher. Much of the focus was on currencies where the EUR continued to climb versus the JPY and GBP on European Central Bank taper worries, and sterling saw another 31-year low at 1.2685 in follow-through selling after Prime Minister Theresa May’s comments on a hard Brexit. Oil prices are higher at $49.65.

Services Purchasing Managers’ Index (PMI) data dominated overnight, with the Eurozone final services index coming in at 52.2 in September from 52.8 in August, while retail sales slipped 0.1% in August, and were revised lower in July. There’s a busy domestic slate, with the September ADP private employment survey missing expectations ahead of Friday’s jobs report. Also on tap is the September Institute for Supply Management (ISM) services at 9:45 a.m. ET with the September Markit services PMI and August factory orders are due at 10 a.m. Weekly oil inventories are due at 10:30 a.m. The Mortgage Bankers’ Association (MBA) reported applications climbed 2.9% in the September 30 week. There are also speeches from Minneapolis Federal Reserve President, Neel Kashkari, at 9:30 and Richmond’s Jeffrey Lacker at 1 p.m. and 5 p.m. Earlier Chicago Fed head Charles Evans said he expects one hike this year.

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