Bond Market Update

Pressured After Midweek Break

• U.S. Treasuries are on track for a lower start after Tuesday's strong intraday bounce. Treasury futures began inching lower last evening, spending the remainder of the night at their worst levels. The market has seen some buying over the past couple hours, lifting the action toward the midpoint of the overnight range. Economic data released overnight was limited with New Zealand emerging from a brief technical recession after reporting its first quarter of growth since Q2 2023. The market did hear from several central banks, as the People's Bank of China made no changes to its one-year and five-year loan prime rates, as expected, while the Swiss National Bank unexpectedly lowered its policy rate by 25 bps to 1.25%, and the Bank of England kept its bank rate at 5.25%, which was expected. Meanwhile, Norges Bank kept its policy rate at 4.50% but raised its rate outlook. The U.S. session will feature the release of some housing data alongside the latest jobless claims report. Crude oil is holding at its best level since the end of April while the U.S. Dollar Index is up 0.1% at 105.39.
• Yield Check:
  • 2-yr: +3 bps to 4.73%
  • 3-yr: +3 bps to 4.46%
  • 5-yr: +4 bps to 4.27%
  • 10-yr: +3 bps to 4.25%
  • 30-yr: +3 bps to 4.38%

• News:
  • China Securities Regulatory Commission plans to accelerate the overseas listing process for Chinese companies.
  • Japan's Lower House struck down a no-confidence vote against Prime Minister Kishida.
  • Germany's ifo Institute raised its domestic growth forecast for 2024 to 0.4% from 0.2%.
  • Pre-election polls from the U.K. suggest that the Conservative party is on track for its largest loss in history.
  • Singapore's Q1 Unemployment Rate rose to 2.1% from 2.0%, as expected.
  • Hong Kong's May Unemployment Rate remained at 3.0%.
  • New Zealand's Q1 GDP expanded 0.2% qtr/qtr (expected 0.1%; last -0.1%), growing 0.3% yr/yr (expected 0.2%; last -0.2%). Q1 GDP Expenditure was up 0.1% qtr/qtr (last 0.1%). 
  • Germany's May PPI was unchanged m/m (expected 0.1%; last 0.2%), falling 2.2% yr/yr (expected -2.0%; last -3.3%).
  • Swiss May trade surplus reached CHF5.811 bln (expected surplus of CHF3.840 bln; last surplus of CHF4.339 bln).
• Commodities:
  • WTI Crude: +0.2% to $81.73/bbl
  • Gold: +0.2% to $2352.60/ozt
  • Copper: +0.5% to $4.513/lb
• Currencies:
  • EUR/USD: -0.3% to 1.0714
  • GBP/USD: -0.3% to 1.2680
  • USD/CNH: +0.1% to 7.2864
  • USD/JPY: +0.3% to 158.43
• Wednesday's Data:
  • The NAHB Housing Market Index fell to 43 in June (Briefing.com consensus 45) from 45 in May.
  • The weekly MBA Mortgage Index was up 0.9% to follow last week's 15.6% increase. The Purchase Index was up 1.6% while the Refinance Index decreased 0.4%.
• Data out Today:
  • 8:30 ET: May Housing Starts (Briefing.com consensus 1.358 mln; prior 1.360 mln), Building Permits (Briefing.com consensus 1.455 mln; prior 1.440 mln), weekly Initial Claims (Briefing.com consensus 237,000; prior 242,000), Continuing Claims (prior 1.820 mln), Q1 Current Account Balance (Briefing.com consensus -$203.0 bln; prior -$194.8 bln), and June Philadelphia Fed survey (Briefing.com consensus 6.5; prior 4.5)
  • 11:00 ET: Weekly crude oil inventories (prior +3.73 mln)