Bond Market Update

The Wait Is On

• U.S. Treasuries held to fairly tight trading ranges in the overnight trade. The lack of movement was understandable with participants waiting on the ECB policy decision at 8:15 a.m. ET and a heavy slate of economic data out of the U.S. beginning at 8:30 a.m. ET, which includes the weekly initial jobless claims and September Retail Sales reports. Yields are up a bit across the curve, basically retracing the small gains made in Wednesday's session.

• Yield check:
  • 2-yr: +1 bp to 3.95%
  • 3-yr: +1 bp to 3.86%
  • 5-yr: +2 bps to 3.86%
  • 10-yr: +1 bp to 4.03%
  • 30-yr: +2 bps to 4.32%
• News:
  • Vice President Kamala Harris in interview says her presidency will not be a continuation of President Biden, according to Fox News
  • The ECB has a policy meeting today and is widely expected at 8:15 a.m. ET to announce a 25-basis points cut to its key interest rates. A rate cut today would mark the first consecutive rate cuts by the ECB in 13 years.
  • The final September CPI report for the eurozone provided the ECB with cover to cut rates, coming in at 1.7% yr/yr
  • China's Housing Minister said the year-end loan quota for unfinished projects will be 4 trillion yuan compared to the 2.23 trillion that has been allocated as of October 16
  • Japan reports first decline in exports (-1.7% yr/yr) in 10 months
  • Nikkei revealed a poll that suggested the LDP is at risk of losing its majority in the lower house following the October 27 election
  • Australia reported better-than-expected September employment data
• Commodities:
  • WTI crude: +0.4% to $70.65/bbl
  • Gold: +0.4% to $2702.60/ozt
  • Copper: -0.7% to $4.34/lb
• Currencies:
  • EUR/USD: +0.1% to 1.0866
  • GBP/USD: +0.2% to 1.3013
  • USD/CNH: flat at 7.1349
  • USD/JPY: flat at 149.58
• The Day Ahead:
  • 08:15 ET: ECB Policy Decision
  • 08:30 ET: Initial Jobless Claims (Briefing.com consensus 270K; prior 258K) and Continuing Jobless Claims (Prior 1861K)
  • 08:30 ET: September Retail Sales (Briefing.com consensus 0.2%; prior 0.1%) and Retail Sales Ex-Auto (Briefing.com consensus 0.1%; prior 0.1%)
  • 08:30 ET: October Philadelphia Fed Index (Briefing.com consensus 4.0; prior 1.7)
  • 09:15 ET: September Industrial Production (Briefing.com consensus -0.1%; prior 0.8%) and Capacity Utilization (Briefing.com consensus 77.9%; prior 78.0%)
  • 10:00 ET: August Business Inventories (Briefing.com consensus 0.3%; prior 0.4%)
  • 10:00 ET: October NAHB Housing Market Index (Briefing.com consensus 43; prior 41)
  • 10:30 ET: EIA Natural Gas Inventories (Prior +82 bcf)
  • 11:00 ET: EIA Crude Oil Inventories (Prior +5.81M)
  • 16:00 ET: August Net Long-Term TIC Flows (Prior $135.4B)