Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a slightly lower start after two days of gains. Treasury futures spent the early part of the evening session in a sideways range, inching to lows once the focus turned to action in Europe. Other sovereign debt has traded in mixed fashion while global equity markets have had a generally good showing. Economic data released overnight showed that South Korea continued exporting at a blistering pace in March while Industrial Production in the eurozone slightly beat February expectations (0.4%; expected 0.3%), but it was down on a year-over-year basis (-1.0%). Economic data scheduled for release during the U.S. session will include the Empire State Manufacturing (Briefing.com consensus 0.0; prior -0.2) survey and NAHB Housing Market Index (Briefing.com consensus 38; prior 38) for April. Crude oil hovers just below $92/bbl while the U.S. Dollar Index is up 0.1% at 98.25.
• Yield Check:
  • 2-yr: +1 bp to 3.76%
  • 3-yr: +1 bp to 3.77%
  • 5-yr: +1 bp to 3.88%
  • 10-yr: +1 bp to 4.27%
  • 30-yr: +1 bp to 4.88%

• News:
  • Treasury Secretary Bessent said that growth in 2026 could easily exceed 3.0% and that tariffs could be restored to their prior levels by July.
  • China's President Xi met with Russia's Foreign Minister Lavrov.
  • China's Foreign Ministry vowed to implement countermeasures if the U.S. raises tariffs on China due to the conflict with Iran.
  • IPO proceeds in China were up 60% yr/yr in Q1, according to Shanghai Securities News.
  • New Zealand's Prime Minister Luxon said that the country's refined fuel supplies for May are secure.
  • European Central Bank President Lagarde repeated that the ECB is in a good position to respond to the Iran conflict, but also said it is too early to determine the full impact of the energy price shock.
  • Japan's April Reuters Tankan Index fell to 7 from 18. February Core Machinery Orders rose 13.6% m/m (expected -1.1%; last -5.5%), jumping 24.7% yr/yr (expected 8.5%; last 13.7%).
  • South Korea's March Unemployment Rate fell to 2.7% from 2.9%. March trade surplus reached $26.24 bln (expected $25.74 bln; last $15.38 bln) as imports grew 13.2% yr/yr, as expected (last 7.5%), and exports jumped 49.2% yr/yr (expected 48.3%; last 28.7%). March Import Price Index was up 18.4% yr/yr (last 1.6%) and Export Price Index was up 28.7% yr/yr (last 11.1%).
  • India's March WPI Inflation was up 3.88% yr/yr (expected 3.00%; last 2.13%). March trade deficit reached $20.67 bln (expected deficit of $32.75 bln; last deficit of $27.10 bln).
  • Eurozone's February Industrial Production was up 0.4% m/m (expected 0.3%; last -0.8%) but down 0.6% yr/yr (expected -1.0%; last -0.6%).
  • France's March CPI was up 1.0% m/m (expected 0.9%; last 0.6%), rising 1.7% yr/yr, as expected (last 0.9%).
• Commodities:
  • WTI Crude: +0.2% to $91.45/bbl
  • Gold: -0.3% to $4834.00/ozt
  • Copper: UNCH at $6.081/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1783
  • GBP/USD: -0.1% to 1.3554
  • USD/CNH: +0.1% to 6.8179
  • USD/JPY: +0.2% to 159.05
• Data out Today:
  • 7:00 ET: Weekly MBA Mortgage Index (actual 1.8%; prior -0.8%)
  • 8:30 ET: April Empire State Manufacturing (Briefing.com consensus 0.0; prior -0.2), March Import Prices (prior 1.3%), Import Prices ex-oil (prior 1.1%), Export Prices (prior 1.5%), and Export Prices ex-ag (prior 1.7%)
  • 10:00 ET: April NAHB Housing Market Index (Briefing.com consensus 38; prior 38)
  • 10:30 ET: Weekly crude oil inventories (prior +3.08 mln)
  • 14:00 ET: April Beige Book
  • 16:00 ET: February Net Long-Term TIC Flows (prior $15.5 bln)