Bond Market Update

Lower Start Ahead

• U.S. Treasuries are on track for a lower start with longer tenors expected to pace early weakness, making for a continuation of last week's dynamic. Treasury futures spent the early portion of the night in a sideways range, but slid to lows alongside other sovereign debt during the European session. The overnight news flow was on the light side, leaving the overall focus on ongoing uncertainty related to trade policies of the incoming Trump administration. In other news, the Biden administration authorized Ukraine to strike some targets inside Russia with American weapons. Crude oil is fighting to stay above its low from September while the U.S. Dollar Index is up 0.1% at 106.75.
• Yield Check:
  • 2-yr: +3 bps to 4.33%
  • 3-yr: +3 bps to 4.30%
  • 5-yr: +4 bps to 4.34%
  • 10-yr: +5 bps to 4.48%
  • 30-yr: +6 bps to 4.66%

• News:
  • Bank of Japan Governor Ueda said that the timing of further rate adjustment will be dependent on economic activity, the evolution of prices, and future financial conditions.
  • China will cancel export tax refunds on copper and aluminum, starting December 1.
  • Japan's September Core Machinery Orders were down 0.7% m/m (expected 1.4%; last -1.9%), falling 4.8% yr/yr (expected 2.2%; last -3.4%).
  • South Korea's October trade surplus reached $3.15 bln (last surplus of $3.17 bln) as imports grew 1.7% yr/yr (last 1.7%) and exports rose 4.6% yr/yr (last 4.6%).
  • Singapore's October trade surplus reached SGD4.41 bln (last surplus of SGD5.21 bln). October non-oil exports were down 7.4% m/m (last -0.6%), falling 4.6% yr/yr (last 0.9%).
  • New Zealand's Q3 Input PPI was up 1.9% qtr/qtr (expected 1.0%; last 1.4%) and Output PPI was up 1.5% qtr/qtr (expected 0.9%; last 1.1%).
  • Eurozone's September trade surplus reached EUR12.5 bln (expected surplus of EUR7.9 bln; last surplus of EUR4.1 bln).
  • U.K.'s November Rightmove House Price Index was up 1.2% yr/yr (last 1.0%).
  • Spain's September trade deficit reached EUR3.30 bln (last deficit of EUR4.80 bln).
  • Swiss Q3 Industrial Production rose 3.5% yr/yr (last 7.0%).
• Commodities:
  • WTI Crude: +0.5% to $67.34/bbl
  • Gold: +1.1% to $2599.10/ozt
  • Copper: +0.2% to $4.074/lb
• Currencies:
  • EUR/USD: +0.1% to 1.0547
  • GBP/USD: +0.1% to 1.2626
  • USD/CNH: +0.1% to 7.2478
  • USD/JPY: +0.6% to 155.26
• Data out Today:
  • 10:00 ET: November NAHB Housing Market Index (Briefing.com consensus 43; prior 43)
  • 16:00 ET: September Net Long-Term TIC Flows (prior $111.4 bln)