hanz writes "U.S. stocks ended higher last night as solid earnings reports from blue-chip companies like United Technologies Corp. and McDonald's Corp. offset disappointing forecasts by others.

Further extending the gains was a sharp drop in oil futures amid expectations of rising U.S. crude inventories. The Dow Jones industrial average was up 23.45 points, to close at 10,712.22. The Standard & Poor's 500 Index was up 3.04 points, at 1,266.86. The Nasdaq Composite Index was up 16.78 points, at 2,265.25.

Oil prices eased on Tuesday after rising in recent sessions, with U.S. crude futures falling to $66.87 per barrel.




US Treasuries
Recap - USTs sold off by 1-4bps amidst mild curve steepening on Tuesday. The negative tone mainly emanated from firmer equities and a weak 20Y TIPS auction, which received a paltry bid/cover ratio of just 1.48x versus 1.70x previously. However, we note that the indirect bidder participation was high at 55.6%.

Look ahead - On the data front, Dec existing home sales is due tonight, which will be carefully watched as with recent housing data releases. We forecast a mild drop to 6.88mn versus 6.97mn in Nov, driven by higher mortgage rates. Meanwhile, focus will also be on the UST 2Y note auction. We maintain our bearish curve steepening view for the UST market. "