Bond Market Update

Finding a Bid

• U.S. Treasuries are bid across the curve, garnering support from the news that President Trump agreed to delay his recommended 50% tariff rate for the EU until July and that Japan is considering cutting back its issuance of longer-dated bonds. The 10-yr note yield has dropped below 4.50%, and the 30-yr bond yield has dropped below 5.00%, with economic data and a $69 billion 2-yr note auction on tap starting with the April Durable Goods Orders Report at 8:30 a.m. ET. The dollar is showing some strength against other major currencies. The U.S. Dollar Index is up 0.2% to 99.34.
• Yield Check:
  • 2-yr: -1 bp to 3.98%
  • 3-yr: -2 bps to 3.94%
  • 5-yr: -3 bps to 4.05%
  • 10-yr: -4 bps to 4.47%
  • 30-yr: -6 bps to 4.98%

• News:
  • President Trump agrees to extend deadline for EU tariffs to July 9 and says talks will begin "rapidly"
  • EU agrees to accelerate discussions with U.S. to avoid trade war, according to Bloomberg
  • Senator Ron Johnson (R-WI) in interview says there is enough Senate Republicans to hold up the reconciliation bill unless larger spending cuts are included, according to CNN
  • President Trump condemned Russian President Putin for recent attacks on Ukraine and said he is considering additional Russian sanctions, according to New York Times
  • Minneapolis Fed President Kashkari (non-FOMC voter) suggests more time needed to assess data to determine policy course
  • Japan mulling trimming issuance of long dated bonds, according to Reuters
  • Japan wants to reach tariff agreement with U.S. in June, according to Bloomberg
• Commodities:
  • WTI crude: -0.2% to $61.43/bbl
  • Gold: -2.2% to $3291.90/ozt
  • Copper: -1.8% to $4.75/lb
• Currencies:
  • EUR/USD: -0.3% to 1.1350
  • GBP/USD: -0.1% to 1.3549
  • USD/CNH: +0.2% to 7.1918
  • USD/JPY: +0.9% to 144.06
• The Day Ahead:
  • 08:30 ET: April Durable Goods Orders (Briefing.com consensus -8.1%; prior 9.2%) and Durable Goods Orders, Excluding Transportation (Briefing.com consensus 0.0%; prior 0.0%)
  • 09:00 ET: March FHFA Home Price Index (Briefing.com consensus 0.2%; prior 0.1%)
  • 09:00 ET: March S&P 500 Case-Shiller Home Price Index (Briefing.com consensus 4.4%; prior 4.5%)
  • 10:00 ET: May Consumer Confidence (Briefing.com consensus 87.0; prior 86.0)
  • 13:00 ET: $69 billion 2-yr note auction