Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a modestly lower start after yesterday's solid advance across the curve. Treasury futures spent the early portion of the night in a sideways range, slowly sliding to lows once the focus shifted to action in Europe. Global equity markets have had a mixed showing, though the overall scope of gains and losses has been limited. The night did not feature any noteworthy economic releases and that will remain the case during the U.S. session. That said, Fed Chairman Powell will speak at 8:30 ET, which could produce some headlines. Crude oil is under some early pressure while the U.S. Dollar Index is little changed at 97.82.
• Yield Check:
  • 2-yr: +1 bp to 3.86%
  • 3-yr: +1 bp to 3.81%
  • 5-yr: +1 bp to 3.92%
  • 10-yr: +1 bp to 4.38%
  • 30-yr: +2 bps to 4.96%

• News:
  • China's COSCO is reportedly seeking veto rights in the Panama port deal that was made in March.
  • The latest policy minutes from the Reserve Bank of Australia showed a majority view that inflation trends should be confirmed before additional easing is announced. Three out of nine policymakers opposed the central bank's pause in its rate cut campaign.
  • There is growing speculation that British Chancellor Reeves will have to call for spending cuts or higher taxes in the Autumn budget statement despite a prior pledge that taxes will not be raised.
  • The Bank of England's project to launch a digital pound could be terminated due to increasing resistance from the public.
  • The European Central Bank's lending survey for Q2 showed steady bank lending conditions and rising loan demand from households.
  • South Korea's June PPI was up 0.1% m/m (last -0.4%), rising 0.5% yr/yr (last 0.3%).
  • New Zealand's June trade surplus reached NZD142 mln (expected surplus of NZD1.02 bln; last surplus of NZD1.08 bln).
  • U.K.'s June Public Sector Net Borrowing reached GBP20.68 bln (expected GBP17.4 bln; last GBP17.44 bln) and June Public Sector Net Cash Requirements were down GBP16.108 bln (prior GBP20.959 bln).
• Commodities:
  • WTI Crude: -1.1% to $65.25/bbl
  • Gold: -0.2% to $3399.30/ozt
  • Copper: +0.4% to $5.659/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1701
  • GBP/USD: UNCH at 1.3487
  • USD/CNH: +0.1% to 7.1746
  • USD/JPY: -0.1% to 147.17
• No Data on Today's Schedule