Bond Market Update

Eye on PPI

• U.S. Treasuries are sitting tight in front of the 8:30 a.m. ET release of the June PPI report after getting hit yesterday with selling pressure in the wake of the June CPI report, which did not eradicate concerns about tariffs contributing to higher inflation. Tight trading ranges persisted overnight, which featured a CPI report for June out of the U.K. that was hotter than expected. The U.S. Dollar Index is flat at 98.58.
• Yield Check:
  • 2-yr: -1 bp to 3.95%
  • 3-yr: -1 bp to 3.92%
  • 5-yr: -1 bp to 4.04%
  • 10-yr: -1 bp to 4.48%
  • 30-yr: -1 bp to 5.01%

• News:
  • President Trump will sign executive order to make private investments available in 401K plans, according to The Wall Street Journal
  • Senate votes to advance legislation that cuts $9 bln from foreign aid and public broadcasting to a final Senate vote later today, according to The Wall Street Journal
  • President Trump says that pharma tariffs are likely by August 1, and chip tariffs will also be implemented, according to Bloomberg
  • Treasury Secretary Bessent said that the U.S. isn't going to rush deals because of some market deadline, like the August 12 pause expiration for China, according to Bloomberg
  • CMS announces proposed rules for hospital payments in 2026
  • Chip equipment maker ASML saying it cannot confirm if it will deliver growth in 2026 due to the uncertainty driven by macroeconomic and geopolitical developments
  • Dallas Fed President Logan (non FOMC voter) says Fed should keep rates where they are for now to help get inflation to sustainable target but acknowledges may need to cut if there is a combination of softer inflation and a weakening labor market, according to Bloomberg
  • MBA Mortgage Applications Index -10.0% wk/wk, with refinance applications down 7% and purchase applications down 12%
  • U.K.'s June CPI 0.3% m/m (expected 0.2%; last 0.2%) and 3.6% yr/yr (expected 3.4%; last 3.4%); June Core CPI 0.4% m/m (expected 0.2%; last 0.2%) and 3.7% yr/yr (expected 3.5%; last 3.5%)
• Commodities:
  • WTI crude: -0.9% to $65.93/bbl
  • Gold: +0.2% to $3343.20/ozt
  • Copper: -1.0% to $5.52/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1611
  • GBP/USD: +0.1% to 1.3398
  • USD/CNH: +0.2% to 7.1854
  • USD/JPY: -0.1% to 148.64
• The Day Ahead:
  • 07:00 ET: MBA Mortgage Applications Index (prior 9.4%)
  • 08:30 ET: June PPI (Briefing.com consensus: 0.2%; prior 0.1%) and core PPI (Briefing.com consensus: 0.2%; prior 0.1%)
  • 09:15 ET: June Industrial Production (Briefing.com consensus: 0.1%; prior -0.2%) and Capacity Utilization (Briefing.com consensus: 77.4%; prior 77.4%)
  • 10:00 ET: Fed Governor Barr (FOMC voter)
  • 10:30 ET: EIA Crude Oil Inventories (prior +7.07M)
  • 14:00 ET: Fed's Beige Book
  • 16:30 ET: New York Fed President Williams (FOMC voter)