Bond Market Update

 Familiar Concerns Resurface

• U.S. Treasuries are on track for a slightly lower start after a night that saw renewed concerns about the expected path of the U.S.-Iran conflict. Weekend negotiations in Pakistan did not produce a peace agreement, exerting renewed pressure on the price of oil. U.S. Treasury futures started Sunday with losses, but they spent the rest of the night in a slow rise that erased more than half of the market's overnight losses. Other sovereign debt has also been pressured with yields on JGBs of most tenors hitting fresh cycle highs. The overnight session featured only a small batch of data while the U.S. session will only see the release of Existing Home Sales for March (Briefing.com consensus 4.01 mln; prior 4.09 mln) at 10:00 ET. Crude oil is back above $103/bbl while the U.S. Dollar Index is up 0.3% at 98.95.
• Yield Check:
  • 2-yr: +3 bps to 3.83%
  • 3-yr: +4 bps to 3.86%
  • 5-yr: +4 bps to 3.98%
  • 10-yr: +3 bps to 4.35%
  • 30-yr: +3 bps to 4.94%

• News:
  • President Trump said that the U.S. will blockade Iran's ports.
  • Japan's trade minister Akazawa said that tighter central bank policy could held with inflation.
  • China Securities Daily observed that demand for savings bonds has been hot, with many banks reaching their quotas quickly.
  • ANZ now expects the Reserve Bank of New Zealand to hike rates in July, September, and October.
  • South Korea's exports through the first ten days of April were up 36.7% yr/yr with chip exports jumping 152.0%.
  • Germany's economic ministry expects that high energy prices, supply issues, and economic pressures will persist for the remainder of the year.
  • Hungary will have a more EU-friendly government after a Sunday election unseated Prime Minister Orban's party.
  • Standard & Poor's affirmed the U.K.'s AA rating with a Stable outlook.
  • China's March New Loans reached CNY2.99 trln (expected CNY3.465 trln; last CNY900.0 bln), March outstanding loans grew 5.8% yr/yr (expected 5.9%; last 6.0%), and March total social financing reached CNY5.23 trln (expected CNY5.40 trln; last CNY2.38 trln).
  • India's March CPI was up 3.40% yr/yr (expected 3.48%; last 3.21%).
  • New Zealand's March Performance of Services Index hit 46.0 (last 47.6).
• Commodities:
  • WTI Crude: +7.6% to $103.93/bbl
  • Gold: -1.2% to $4730.10/ozt
  • Copper: -0.2% to $5.875/lb
• Currencies:
  • EUR/USD: -0.3% to 1.1685
  • GBP/USD: -0.3% to 1.3421
  • USD/CNH: +0.2% to 6.8328
  • USD/JPY: +0.4% to 159.81
• Data out Today:
  • 10:00 ET: March Existing Home Sales (Briefing.com consensus 4.01 mln; prior 4.09 mln)