Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a modestly lower start after a sideways night in the futures market. Treasury futures dipped in early evening action, but the losses were largely reversed at the start of the European session. However, some renewed selling pressure has sent Treasury futures toward the midpoint of their overnight range. Overnight action saw the return of many markets that had been closed for Easter, but overall movement was limited as participants remained on edge ahead of tonight's deadline that President Trump gave to Iran or risk facing attacks on its critical infrastructure. The overnight data flow included the release of final March Services PMI readings from major economies, though Australia (46.3), Italy (48.8), and France (48.8) reported contractionary readings. The U.S. session will see the release of February Durable Orders (Briefing.com consensus 0.5%; prior 0.0%) and Durable Orders ex-transport (Briefing.com consensus 0.5%; prior 0.4%) at 8:30 ET and the U.S. Treasury will sell $58 bln in 3-yr notes at 13:00 ET. Crude oil has approached $115/bbl again while the U.S. Dollar Index is little changed at 99.99.
• Yield Check:
  • 2-yr: +1 bp to 3.86%
  • 3-yr: +3 bps to 3.90%
  • 5-yr: 1 bp to 3.99%
  • 10-yr: UNCH at 4.34%
  • 30-yr: +1 bp to 4.90%

• News:
  • The Reserve Bank of New Zealand and Reserve Bank of India will opine tomorrow, but policy changes are not expected. · Japan sold 30-yr JGBs to weak demand despite a downsized auction.
  • Samsung Electronics reported record results for Q1.
  • European Central Bank policymaker Wunsch said that a lasting crisis could invite a series of rate hikes, and that he is open to a hike later this month while policymaker Radev said that it is too early to tell if an April rate hike is needed.
  • China's March FX Reserves reached $3.342 trln (expected $3.400 trln; last $3.428 trln).
  • Japan's February Leading Index rose to 112.4 from 112.1, as expected, and Coincident Indicator was down 1.6% m/m (last 3.4%). February Household Spending rose 1.5% m/m (expected 2.6%; last -2.5%), falling 1.8% yr/yr (expected -0.8%; last -1.0%).
  • Australia's March Services PMI hit 46.3 (expected 46.6; last 52.8). March MI Inflation Gauge was up 1.3% m/m (last -0.2%) and March ANZ Job Advertisements fell 3.1% m/m (last 3.2%).
  • Eurozone's March Services PMI hit 50.2 (expected 50.1; last 51.9). April Sentix Investor Confidence fell to -19.2 from -3.1 (expected -7.5).
  • Germany's March Services PMI hit 50.9 (expected 51.2; last 53.5).
  • U.K.'s March Services PMI hit 50.5 (expected 51.2; last 53.9).
  • France's March Services PMI hit 48.8 (expected 48.3; last 49.6).
  • Italy's March Services PMI hit 48.8 (expected 51.0; last 52.3).
  • Spain's March Services PMI hit 53.3 (expected 50.7; last 51.9).
  • Swiss March Foreign Reserves reached $721.2 bln (last $710.1 bln).
• Commodities:
  • WTI Crude: +2.1% to $114.87/bbl
  • Gold: UNCH at $4685.00/ozt
  • Copper: -0.3% to $5.584/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1557
  • GBP/USD: +0.1% to 1.3243
  • USD/CNH: -0.1% to 6.8653
  • USD/JPY: +0.2% to 159.85
• Data out Today:
  • 8:30 ET: February Durable Orders (Briefing.com consensus 0.5%; prior 0.0%) and Durable Orders ex-transport (Briefing.com consensus 0.5%; prior 0.4%)
  • 15:00 ET: February Consumer Credit (Briefing.com consensus $7.0 bln; prior $8.1 bln)
• Treasury Auctions:
  • 13:00 ET: $58 bln 3-yr Treasury note auction results