Bond Market Update

Pushing Higher

• U.S. Treasuries are on track for a higher start after yesterday's round trip that left the 10-yr yield flat for the day after a sharp early fall. Treasury futures marched higher through the night, though the advance unfolded at a slow pace with highs being reached in recent trade. The overnight data calendar was light, though it is worth noting that South Korea's GDP contracted for the first time since Q4 of 2020 in the reading for Q1 while Germany saw some slight improvement in business sentiment. The U.S. session will see the 8:30 ET release of March Durable Orders (Briefing.com consensus 1.5%; prior 0.9%) and weekly Initial Claims (Briefing.com consensus 220,000; prior 215,000), followed by March Existing Home Sales (Briefing.com consensus 4.20 mln; prior 4.26 mln) at 10:00 ET. The U.S. Treasury will cap this week's note auction slate with a $44 bln 7-yr note sale. Crude oil is on the rise while the U.S. Dollar Index is down 0.5% at 99.33.
• Yield Check:
  • 2-yr: -3 bps to 3.83%
  • 3-yr: -5 bps to 3.83%
  • 5-yr: -3 bps to 3.97%
  • 10-yr: -5 bps to 4.34%
  • 30-yr: -4 bps to 4.79%

• News:
  • President Trump may exempt automakers from paying some tariffs on imports of auto parts.
  • European Central Bank policymaker Rehn said that the ECB should not rule out larger interest rate cuts.
  • Japan's February Corporate Services Price Index was up 3.1% yr/yr (expected 3.0%; last 3.2%).
  • South Korea's Q1 GDP contracted 0.2% qtr/qtr (expected 0.1%; last 0.1%), falling 0.1% yr/yr (expected 0.2%; last 1.2%).
  • Germany's April ifo Business Climate Index hit 86.9 (expected 85.1; last 86.7). April Current Assessment hit 86.4 (expected 85.5; last 85.7) and Business Expectations hit 87.4 (expected 85.0; last 87.7).
  • U.K.'s April CBI Industrial Trends Orders rose to -26 from -29 (expected -36).
  • France's April Consumer Confidence remained at 92 (expected 91). 
  • Spain's March PPI was up 4.9% yr/yr (last 6.6%).
• Commodities:
  • WTI Crude: +1.3% to $63.08/bbl
  • Gold: +1.7% to $3349.70/ozt
  • Copper: +0.6% to $4.873/lb
• Currencies:
  • EUR/USD: +0.5% to 1.1374
  • GBP/USD: +0.4% to 1.3311
  • USD/CNH: +0.1% to 7.2935
  • USD/JPY: -0.4% to 142.51
• Data out Today:
  • 8:30 ET: March Durable Orders (Briefing.com consensus 1.5%; prior 0.9%), Durable Orders ex-transport (Briefing.com consensus 0.3%; prior 0.7%), weekly Initial Claims (Briefing.com consensus 220,000; prior 215,000), and Continuing Claims (prior 1.885 mln)
  • 10:00 ET: March Existing Home Sales (Briefing.com consensus 4.20 mln; prior 4.26 mln)
  • 10:30 ET: Weekly natural gas inventories (prior +16 bcf)
• Treasury Auctions:
  • 13:00 ET: $44 bln 7-yr Treasury note auction results