Bond Market Update

Wait for It

• U.S. Treasuries are a bit weaker across most of the curve today, succumbing to some selling interest after yesterday's rally and in the wake of Japan's 40-yr government bond auction seeing the weakest demand since July, according to Reuters. Overall, there is a wait-and-see feeling among market participants eager to see how today's $70 billion 5-yr note auction goes at 1:00 p.m. ET, what the FOMC Minutes for the May 6-7 meeting convey at 2:00 p.m. ET, and how the stock market reacts to NVIDIA's (NVDA) earnings report after today's close. The U.S. Dollar Index is up 0.1% to 99.64.
• Yield Check:
  • 2-yr: unch at 3.96%
  • 3-yr: +2 bps to 3.94%
  • 5-yr: +2 bps to 4.04%
  • 10-yr: +2 bps to 4.45%
  • 30-yr: +2 bps to 4.96%

• News:
  • Japanese bond auction demand was the lowest since July of last year, according to Reuters
  • Elon Musk in an interview says he is disappointed that the large reconciliation bill does not contain more spending cuts, according to CBS News
  • Canadian Prime Minister Mark Carney says Canada and U.S. in discussions regarding new economic and security deal, according to The Wall Street Journal
  • Russian President Putin wants a pledge to halt NATO enlargement in exchange for a peace deal, according to Reuters
  • Speculation that ECB President Lagarde could leave her post about a year before the end of her term to become the chair of the World Economic Forum
  • Japan is reportedly willing to commit to buying JPY1 trln worth of chips as part of a potential trade deal with the U.S.
  • The Reserve Bank of New Zealand lowered its official cash rate by 25 basis points to 3.25%, as expected, though the policy statement had some hints of hawkishness
  • $70 billion 5-yr note auction results at 1:00 p.m. ET
• Commodities:
  • WTI crude: +1.0% to $61.50/bbl
  • Gold: +0.4% to $3312.30/ozt
  • Copper: +0.4% to $4.76/lb
• Currencies:
  • EUR/USD: flat at 1.1324
  • GBP/USD: -0.2% to 1.3484
  • USD/CNH: flat at 7.1898
  • USD/JPY: flat at 144.27
• The Day Ahead:
  • 13:00 ET: $70 billion 5-yr note auction
  • 14:00 ET: FOMC Minutes for May 6-7 meeting