Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a slightly lower start after a quiet night in the futures market. Treasury futures dipped out of the gate on Sunday evening, but quickly recovered their losses, spending the remainder of the night in a sideways range. Futures revisited their lows at the start of the European session, before returning to levels last seen on Sunday evening. The week got off to a solid start in global equity markets after China reported stronger-than-expected GDP for Q3 (1.1%; expected 0.8%) while two political parties reached a coalition deal in Japan, which helped the Nikkei rally to a new record. Economic data during the U.S. session will be limited to the 10:00 ET release of September Leading Indicators (Briefing.com consensus -0.2%; prior -0.5%). Crude oil is slipping toward Friday's low while the U.S. Dollar Index is up 0.1% at 98.55.
• Yield Check:
  • 2-yr: +1 bp to 3.47%
  • 3-yr: UNCH at 3.47%
  • 5-yr: +1 bp to 3.60%
  • 10-yr: UNCH at 4.01%
  • 30-yr: UNCH at 4.60%

• News:
  • Japan's LDP and Innovation Party agreed to form a coalition government, putting Sanae Takaichi on track to be officially elected new prime minister tomorrow.
  • The People's Bank of China made no changes to its one-year and five-year loan prime rates.
  • Australia's Prime Minister Albanese will meet with President Trump today.
  • Standard & Poor's lowered France's credit rating to A+ from AA- due to persistent fiscal risks.
  • Bundesbank President Nagel said that the EU needs to be more forceful with China to protect its own interests.
  • China's Q3 GDP expanded 1.1% qtr/qtr (expected 0.8%; last 1.0%), growing 4.8% yr/yr (expected 4.7%; last 5.2%). September Fixed Asset Investment was down 0.5% yr/yr (expected 0.1%; last 0.5%), September Industrial Production was up 6.5% yr/yr (expected 5.0%; last 5.2%), September Retail Sales rose 3.0% (expected 2.9%; last 3.4%), and September Unemployment Rate dipped to 5.2% from 5.3% (expected 5.3%).
  • Hong Kong's September Unemployment Rate rose to 3.9% from 3.7%.
  • New Zealand's Q3 CPI was up 1.0% qtr/qtr (expected 0.8%; last 0.5%), rising 3.0% yr/yr, as expected (last 2.7%).
  • Eurozone's August Current Account reached EUR11.9 bln (expected surplus of EUR22.5 bln; last surplus of EUR27.7 bln). August Construction Output was down 0.1% m/m (last 0.5%).
  • Germany's September PPI was down 0.1% m/m (expected 0.1%; last -0.5%), falling 1.7% yr/yr (last -2.2%).
• Commodities:
  • WTI Crude: -0.9% to $57.02/bbl
  • Gold: +1.6% to $4279.00/ozt
  • Copper: +0.4% to $4.99/lb
• Currencies:
  • EUR/USD: UNCH at 1.1650
  • GBP/USD: -0.1% to 1.3405
  • USD/CNH: +0.1% to 7.1277
  • USD/JPY: +0.1% to 150.80
• Data out Today:
  • 10:00 ET: September Leading Indicators (Briefing.com consensus -0.2%; prior -0.5%)