Bond Market Update

Playing It Safe

• U.S. Treasuries saw a steady stream of buying interest in the overnight trade that has persisted. Yields are lower across the curve in a move that has been catalyzed presumably by some safe-haven buying with stocks experiencing follow-through selling and many foreign markets closed Tuesday -- or closing early -- in advance of the New Year's holiday. Separately, Treasury Secretary Yellen has said the debt ceiling will be reached in mid-January; analysts expect extraordinary measures to avoid a default are likely to be exhausted in July or August, according to Bloomberg.
• Yield Check:
  • 2-yr: -4 bps to 4.29%
  • 3-yr: -5 bps to 4.32%
  • 5-yr: -5 bps to 4.41%
  • 10-yr: -4 bps to 4.58%
  • 30-yr: -3 bps to 4.78%

• News:
  • Former President Jimmy Carter has passed away at age 100; President Biden declared January 9 as a National Day of Mourning (stock markets will likely be closed that day)
  • Treasury Secretary Janet Yellen says debt ceiling will be reached in mid-January. Analysts expect Treasury will exhaust extraordinary measures in July or August, according to Bloomberg
  • President-elect Trump urged Supreme Court to pause ban on TikTok, which goes into effect January 19. Supreme Court will hear case on January 10, according to NBC News
  • Jeju Air Flight 7C2216 veered off the runway and crashed; 179 people reported dead; plane was a Boeing 737-800; South Korea declares a national mourning period for Jeju Air crash until Jan. 4
  • President-elect Trump in interview says he supports H1-B visas for highly skilled immigrant workers, according to New York Post
  • President Biden announces nearly $2.5 billion in security assistance for Ukraine
  • China aiming to lower import tariffs on some recycled copper and aluminum raw materials, according to Reuters
  • PBOC Gov Pan reiterated that he sees more scope for RRR cuts, according to People's Daily
• Commodities:
  • WTI crude: +0.4% to $70.88/bbl
  • Gold: +0.1% to $2634.00/ozt
  • Copper: -0.2% to $4.11/lb
• Currencies:
  • EUR/USD: +0.2% to 1.0448
  • GBP/USD: +0.1% to 1.2591
  • USD/CNH: +0.2% to 7.3121
  • USD/JPY: -0.2% to 157.52
• The Day Ahead:
  • 09:45 ET: December Chicago PMI (Briefing.com consensus 42.7; prior 40.2)
  • 10:00 ET: November Pending Home Sales (Briefing.com consensus 0.9%; prior 2.0%)