Bond Market Update

Catching a Bid

• U.S. Treasuries caught a bid overnight that improved as European equity markets surrendered early gains. Equity futures for the U.S. market are mixed but a little shaky-looking, which is fostering some continued safe-haven interest on the notion that stocks could be subjected to further downside. DoubleLine Capital founder and CEO Jeffrey Gundlach is recommending a 20% cash position to guard against a possible downturn in the equity market. Separately, global markets are gearing up for the release of backlogged U.S. government data this week, starting Thursday with the September Employment Situation report. That report will be preceded Wednesday by the release of the FOMC minutes for the October 28-29 meeting.
• Yield Check:
  • 2-yr: -2 bps to 3.59%
  • 3-yr: -3 bps to 3.59%
  • 5-yr: -4 bps to 3.70%
  • 10-yr: -2 bps to 4.13%
  • 30-yr: -3 bps to 4.72%

• News:
  • USTR Jamieson Greer is frustrated with EU's slow pace of regulation and tariff cuts. FT
  • Senator Bill Cassidy in an interview says he is working with the White House on a healthcare plan that would involve sending subsidies to Americans instead of insurance companies. CBS News
  • Treasury Secretary Bessent said the U.S. is targeting completion of a rare earths trade agreement with China by Thanksgiving, with the expectation that the U.S. military won't be excluded from the deal.
  • Former Fed Governor Adriana Kugler allegedly violated Federal Reserve trading rules. Washington Post
  • President Trump is considering talks with Venezuelan President Nicolás Maduro amid U.S. military buildup in the region. Washington Post
  • China sends ships near disputed islands with Japan and warns travelers about safety risks. NY Times
  • DoubleLine Capital's Jeffrey Gundlach recommends a 20% cash position to guard against a downturn in the equity market. Bloomberg
  • China has warned its citizens against traveling to Japan "for safety reasons."
  • The European Commission is forecasting 1.2% GDP growth for the eurozone in 2026 versus 1.3% in 2025, with its inflation forecast marked down to 1.9% versus 2.1% in 2025
  • Japan's 10-yr JGB yield hits its highest level since 2008
  • Japan's Q3 GDP -0.4% qtr/qtr (-0.6% expected; 0.6% last) and -1.8% yr/yr (-2.5% expected; 2.3% last)
• Commodities:
  • WTI crude: -0.2% to $59.97/bbl
  • Gold: -0.4% to $4080.10/ozt
  • Copper: -0.6% to $5.04/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1600
  • GBP/USD: +0.1% to 1.3183
  • USD/CNH: +0.2% to 7.1088
  • USD/JPY: +0.2% to 154.79
• The Day Ahead:
  • 08:30 ET: November Empire State Manufacturing (Briefing.com consensus 6.1; prior 10.7)
  • 09:00 ET: Fed Vice Chair Jefferson (FOMC voter)
  • 13:00 ET: Minneapolis Fed President Kashkari (2026 FOMC voter)
  • 15:35 ET: Fed Governor Waller (FOMC voter)