- The U.S. will be downgraded to "selective default" (SD) if the debt ceiling isn't raised by mid-October and the governmnt fails to service a debt, says S&P, but there will be no change to the AA+ credit rating as long as the impasse is short-lived. "This sort of political brinkmanship is the dominant reason the rating is no longer AAA."
- The story provides an opportunity to check on Treasurys amid the imminent government shutdown. The 10-year yield fell as low as 2.59% overnight, but has returned back to 2.61%, off one basis point on the session.
- TLT -0.2%, TBT +0.4%.
- Earlier: The Chicago PMI prints at 55.7 in September, beating expectations of 54.4 and prior of 53.
- Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.