Bond Market Update

Long End Ahead

• U.S. Treasuries are on track for a modestly higher start in longer tenors while the short end is set to open close to levels from Friday afternoon. Treasury futures faced some pressure in early evening action, but they bounced at the start of the European session, revisiting their highs from last night. Overseas, most sovereign debt was on the rise with demand for Japanese debt pressuring yields from their highest levels of the year, though the 40-yr bond underperformed, pushing its yield to a fresh record high at 2.804%. In the U.S., a government shutdown was averted late Friday after the Senate passed a spending bill. The U.S. session will feature February Retail Sales (Briefing.com consensus 0.7%; prior -0.9%), and Retail Sales ex-auto (Briefing.com consensus 0.4%; prior -0.4%) at 8:30 ET. Crude oil is on the rise while the U.S. Dollar Index is down 0.2% at 103.49.
• Yield Check:
  • 2-yr: UNCH at 4.02%
  • 3-yr: UNCH at 4.00%
  • 5-yr: -1 bp to 4.07%
  • 10-yr: -2 bps to 4.29%
  • 30-yr: -2 bps to 4.60%

• News:
  • There was some speculation that Sanae Takaichi, who supports a weaker yen, could replace Japan's Prime Minister Ishiba.
  • China State Council announced a "Special Action Plan" aimed at increasing domestic demand.
  • The OECD downgraded the U.K.'s growth forecasts for 2025 and 2026, citing weak economic performance and global trade tensions.
  • China's February House Prices were down 4.8% yr/yr (last -5.0%). February Fixed Asset Investment rose 4.1% yr/yr (expected 3.2%; last 3.2%), February Industrial Production rose 5.9% yr/yr (expected 5.3%; last 6.2%), February Retail Sales grew 4.0% yr/yr (expected 3.8%; last 3.7%), and February Unemployment Rate increased to 5.4% from 5.1% (expected 5.1%).
  • South Korea's February trade surplus reached $4.15 bln (expected $4.30 bln; last deficit of $1.86 bln) as imports rose 0.2% yr/yr, as expected (last -6.4%) and exports increased 0.7% yr/yr (expected 1.0%; last -10.2%).
  • India's February trade deficit reached $14.05 bln (last deficit of $22.99 bln). February WPI Inflation was up 2.38% yr/yr (expected 2.36%; last 2.31%), and WPI Food Inflation was up 3.38% yr/yr (last 5.88%).
  • Singapore's February trade surplus reached SGD6.16 bln (last surplus of SGD3.04 bln) as non-oil exports rose 2.6% m/m (expected 2.5%; last -3.3%), increasing 7.6% yr/yr (expected 8.7%; last -2.1%).
  • Italy's February CPI was up 0.2% m/m, as expected (last 0.6%), rising 1.6% yr/yr (expected 1.7%; last 1.5%).
• Commodities:
  • WTI Crude: +1.4% to $68.11/bbl
  • Gold: +0.2% to $3006.70/ozt
  • Copper: +0.7% to $4.928/lb
• Currencies:
  • EUR/USD: +0.2% to 1.0899
  • GBP/USD: +0.3% to 1.2968
  • USD/CNH: -0.1% to 7.2325
  • USD/JPY: -0.1% to 148.47
• Data out Today:
  • 8:30 ET: March Empire State Manufacturing (Briefing.com consensus 2.0; prior 5.7), February Retail Sales (Briefing.com consensus 0.7%; prior -0.9%), and Retail Sales ex-auto (Briefing.com consensus 0.4%; prior -0.4%)
  • 10:00 ET: January Business Inventories (Briefing.com consensus 0.3%; prior -0.2%) and March NAHB Housing Market Index (Briefing.com consensus 43; prior 42)