Bond Market Update

Another Lower Start Ahead

• U.S. Treasuries are on course for another lower start with longer tenors expected to pace the early selling after a fairly quiet night in global markets. Treasury futures inched higher in early evening action, maintaining their slim gains through the Asian session, which included ongoing speculation about the future of Japan's Prime Minister Kishida and news that China is looking to implement additional fiscal stimulus if former President Trump wins next week's election. The market fell to lows once the focus turned to Europe, followed by a shallow bounce during the past three hours. The U.S. session will feature the release of the Consumer Confidence report for October (Briefing.com consensus 99.0; prior 98.7) and September job openings (prior 8.040 mln) while the U.S. Treasury will sell $44 bln in 7-yr notes to follow yesterday's 2- and 5-yr note offerings. Crude oil is staying above yesterday's low (66.92) while the U.S. Dollar Index is up 0.1% at 104.40.
• Yield Check:
  • 2-yr: +1 bp to 4.15%
  • 3-yr: +2 bps to 4.11%
  • 5-yr: +2 bps to 4.13%
  • 10-yr: +2 bps to 4.30%
  • 30-yr: +2 bps to 4.55%

• News:
  • Japan's Prime Minister Ishiba is attempting to form a new ruling coalition but is facing resistance from the leader of the party that he is seeking an alliance with.
  • The Chinese government will purchase more electric vehicles to support the industry.
  • China State Council announced that more support will be provided for families with multiple children.
  • The German Chamber of Commerce and Industry lowered its domestic growth forecast for 2024 to -0.2% from 0.0%.
  • BP and Lufthansa reported a decrease in their respective profits for Q3.
  • European Central Bank policymaker De Guindos acknowledged that inflation is headed in the right direction while growth is not.
  • Japan's September jobs/applications ratio rose to 1.24 from 1.23 (expected 1.23) and September Unemployment Rate fell to 2.4% from 2.5% (expected 2.5%). 
  • Singapore's Q3 Unemployment Rate fell to 1.8% from 2.0%.
  • Germany's November GfK Consumer Climate improved to -18.3 from -21.0 (expected -20.4).
  • U.K.'s September BoE Consumer Credit reached GBP1.213 bln (expected GBP1.40 bln; last GBP1.352 bln). September net lending to individuals reached GBP3.80 bln (expected GBP4.10 bln; last GBP4.156 bln) and Mortgage Approvals hit 65,650 (expected 65,000; last 64,960).
• Commodities:
  • WTI Crude: +1.1% to $68.14/bbl
  • Gold: +0.2% to $2762.40/ozt
  • Copper: +1.3% to $4.419/lb
• Currencies:
  • EUR/USD: -0.2% to 1.0797
  • GBP/USD: +0.1% to 1.2984
  • USD/CNH: +0.2% to 7.1554
  • USD/JPY: +0.3% to 153.63
• Data out Today:
  • 9:00 ET: August FHFA Housing Price Index (prior 0.1%) and August S&P Case-Shiller Home Price Index (Briefing.com consensus 5.1%; prior 5.9%)
  • 10:00 ET: October Consumer Confidence (Briefing.com consensus 99.0; prior 98.7) and September job openings (prior 8.040 mln)
• Treasury Auctions:
  • 13:00 ET: $44 bln 7-yr Treasury note auction results