Bond Market Update

Ticking Lower

• U.S. Treasuries are on track for a slightly lower start after a volatile week. Treasury futures dipped at the start of the overnight session, followed by a brief return to little changed before slipping to fresh lows around the start of the European session. The movement has unfolded inside narrow range with little influence from news or economic headlines. Japan's Nikkei was closed today, and a former Bank of Japan official Sakurai said that the central bank will not be able to raise rates again until at least March. In Europe, equity markets are off to a mostly higher star while sovereign debt has faced some light pressure. Crude oil is on the rise while the U.S. Dollar Index is up 0.1% at 103.21.
• Yield Check:
  • 2-yr: +1 bp to 4.06%
  • 3-yr: UNCH at 3.88%
  • 5-yr: UNCH at 3.80%
  • 10-yr: +1 bp to 3.95%
  • 30-yr: UNCH at 4.23%

• News:
  • South Korea's exports through the first ten days of August were up 16.7% yr/yr with chip exports jumping 42.1%.
  • Bank of England policymaker Mann said that wage growth in the U.K. remains concerning even though overall inflation is near the central bank's target.
  • Fitch affirmed the Netherlands' AAA rating with a Stable outlook and affirmed Finland's AA+ rating with a Negative outlook, down from Stable.
  • Germany's July WPI was up 0.3% m/m (expected 0.2%; last -0.3%) but down 0.1% yr/yr (last -0.6%).
• Commodities:
  • WTI Crude: +1.2% to $77.74/bbl
  • Gold: +0.3% to $2480.40/ozt
  • Copper: +1.6% to $4.059/lb
• Currencies:
  • EUR/USD: +0.1% to 1.0925
  • GBP/USD: +0.1% to 1.2770
  • USD/CNH: +0.1% to 7.1813
  • USD/JPY: +0.6% to 147.56
• Data out Today:
  • 14:00 ET: July Treasury Budget (prior -$66.0 bln)