Forex Flash: 10-year US treasuries await Fed testimony tomorrow – RBS (Barcelona) - Markets continue to see a near-term 1.70% to 2.11% range in 10-year US treasuries Monday – According to the RBS Research Team, “key resistance remains at 2.11% in 10yrs. We recommend watching for ascending bear channel lines (1.945% in 10-years and 3.135% in bonds) – a break of which could extend the rally while a close above 2.11% in 10-years opens up 2.30%.”

Treasuries are little changed as markets await Ben Bernanke's testimony tomorrow and following the exit polls of the Italian election. Once past these, market focus is likely to shift to month end and a decent Treasury extension along with a likely trip over the Sequester cliff at the end of the week.

China's HSBC Flash PMI slipped to a 4-month low but Japanese stocks rallied sharply on word that Kuroda of the ADB would likely become the next BOJ Governor. EU spreads see semi-core little changed and peripherals modestly tighter. Moody's warned that the recent European Commission forecast for economic contraction this year is a credit negative for all European sovereigns.