Bond Market Update

Geopolitical Concerns Persist as Weekend Looms

• U.S. Treasuries are on track for a lower start in longer tenors while the short end is expected to show some early relative strength. Treasury futures on longer tenors faced overnight pressure alongside other sovereign debt as global investors remained uneasy about the uncertainty surrounding the conflict with Iran ahead of another weekend. Iran has shown little interest in a peace plan proposed by the U.S., though President Trump again delayed planned attacks on Iran's energy infrastructure to allow for negotiations. Meanwhile, the Pentagon is sending an additional 10,000 troops to the Middle East, giving the market another reason to speculate that the conflict could continue for some time. Treasury futures reached lows shortly after the start of the European session, followed by a shallow bounce over the past couple hours. Today's economic data will be limited to the 10:00 ET release of the final March Consumer Sentiment survey from the University of Michigan (Briefing.com consensus 55.5; prior 55.5). Crude oil is back above $95/bbl while the U.S. Dollar Index is up 0.2% at 100.06.
• Yield Check:
  • 2-yr: +2 bps to 4.00%
  • 3-yr: +3 bps to 4.02%
  • 5-yr: +4 bps to 4.14%
  • 10-yr: +4 bps to 4.46%
  • 30-yr: +4 bps to 4.98%

• News:
  • President Trump ordered the Department of Homeland Security to pay TSA agents.
  • The New York Fed is expected to reduce its purchases of Treasury bills after the April 15 tax deadline.
  • Japan's Finance Minister Katayama warned about a potential intervention in the currency market after the yen approached 160/dollar, its weakest level since mid-2024.
  • The Japanese government confirmed a provisional budget of JPY8.6 trln.
  • China has yet to confirm the rescheduled mid-May meeting between Presidents Trump and Xi.
  • China imposed a 55% additional tariff on beef imports from Australia.
  • China's February Industrial Profit was up 15.2% YTD (last 0.6%).
  • U.K.'s February Retail Sales were down 0.4% m/m (expected -0.6%; last 2.0%) but up 2.5% yr/yr (expected 2.1%; last 4.8%). February Core Retail Sales were down 0.4% m/m (expected -0.8%; last 2.2%) but up 3.4% yr/yr (expected 2.9%; last 5.9%).
  • Italy's February non-EU trade surplus reached EUR5.53 bln (last surplus of EUR2.23 bln).
  • Spain's flash March CPI was up 1.0% m/m (expected 1.2%; last 0.4%), rising 3.3% yr/yr (expected 3.6%; last 2.3%). Flash March Core CPI was up 2.7% yr/yr (last 2.7%).
• Commodities:
  • WTI Crude: +2.2% to $96.55/bbl
  • Gold: +0.9% to $4416.50/ozt
  • Copper: UNCH at $5.476/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1506
  • GBP/USD: -0.4% to 1.3281
  • USD/CNH: UNCH at 6.9206
  • USD/JPY: +0.1% to 159.86
• Data out Today:
  • 10:00 ET: Final March University of Michigan Consumer Sentiment (Briefing.com consensus 55.5; prior 55.5)