Bond Market Update

Little Changed After Quiet Night

• U.S. Treasuries are on track for a flat start after a quiet night in the futures market. Treasury futures inched lower through the night, hitting their worst levels shortly after the start of the European session. However, the selling was reversed over the next couple hours, returning Treasury futures to little changed. Overnight action featured some guarded optimism in global equity markets, thanks in part to a lack of reports about additional hostilities in the Middle East. However, crude oil has sustained yesterday's gain, remaining near $98/bbl. Economic data released overnight included China's deflationary March CPI reading (-0.7%; expected -0.2%) and its first increase in producer prices since late 2022. Inflation will remain the theme during the U.S. session with March CPI (Briefing.com consensus 0.7%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%) set to be released at 8:30 ET. The U.S. Dollar Index is down 0.1% at 98.76.
• Yield Check:
  • 2-yr: UNCH at 3.78%
  • 3-yr: -1 bp to 3.80%
  • 5-yr: -1 bp to 3.91%
  • 10-yr: UNCH at 4.29%
  • 30-yr: UNCH at 4.90%

• News:
  • The Senate Banking Committee will delay Kevin Warsh's confirmation hearing that was scheduled for next week.
  • The Bank of Korea left its policy rate at 2.50%, as expected, warning about the risk of higher prices and lower growth resulting from the U.S.-Iran conflict. 
  • Germany's economy minister voiced opposition to taxing surplus profits of energy companies but also spoke in favor of measures to offset the impact of high energy prices for consumers.
  • Hungary will hold a parliamentary election on Sunday with polls pointing to a tight race.
  • China's March CPI was down 0.7% m/m (expected -0.2%; last 1.0%) but up 1.0% yr/yr (expected 1.2%; last 1.3%). March PPI was up 0.5% m/m (expected 0.4%; last -0.9%).
  • Japan's March PPI was up 0.8% m/m (expected 0.9%; last 0.1%), rising 2.6% yr/yr (expected 2.4%; last 2.1%). March Bank Lending increased by 4.8% yr/yr (expected 4.4%; last 4.5%).
  • Australia's February Building Approvals rose 29.7% m/m, as expected (last -7.2%), increasing 14.0% yr/yr, as expected (last 15.7%). February Private House Approvals ticked up 0.2% m/m, as expected (last 1.1%).
  • New Zealand's March Business PMI hit 53.2 (last 54.8).
  • Germany's March CPI was up 1.1% m/m, as expected (last 0.2%), rising 2.7% yr/yr, as expected (last 1.9%).
  • Italy's February Industrial Production was up 0.1% m/m (expected 0.5%; last -0.6%), rising 0.5% yr/yr, as expected (last -0.6%).
  • Swiss March SECO Consumer Climate fell to -43 from -30 (expected -32).
• Commodities:
  • WTI Crude: +0.2% to $98.02/bbl
  • Gold: -0.6% to $4788.70/ozt
  • Copper: +1.4% to $5.846/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1714
  • GBP/USD: +0.1% to 1.3445
  • USD/CNH: UNCH at 6.8264
  • USD/JPY: +0.1% to 159.18
• Data out Today:
  • 8:30 ET: March CPI (Briefing.com consensus 0.7%; prior 0.3%) and Core CPI (Briefing.com consensus 0.3%; prior 0.2%)
  • 10:00 ET: February Factory Orders (Briefing.com consensus 0.5%; prior 0.1%) and preliminary April University of Michigan Consumer Sentiment (Briefing.com consensus 52.0; prior 53.3)
  • 14:00 ET: March Treasury Budget (Briefing.com consensus -$160.0 bln; prior -$307.5 bln)