Bond Market Update

Quiet Start to New Week

• U.S. Treasuries began the week on a mostly flat note, spending the session near their unchanged levels with the 10-yr yield bouncing inside a three-basis point range. The Monday session was subdued from the start, as Treasuries opened with slim losses, but quickly returned to little changed. The market pushed into positive territory in mid-morning action, but that move did not invite additional buying. Instead, Treasuries continued drifting near their flat lines into the close. The long bond outperformed a bit, rallying past its morning high during the final few minutes of action. The market did not receive any noteworthy data today, but the activity on that front will pick up as the week goes on. The Consumer Confidence (Briefing.com consensus 100.0; prior 102.0) report for June will be released at 10:00 ET tomorrow and the U.S. Treasury will hold a $69 bln 2-yr Treasury note offering to kick off this week's note auction slate. Crude oil continued its newfound show of strength while the U.S. Dollar Index fell 0.3% to 105.47.
• Yield Check:
  • 2-yr: UNCH at 4.73%
  • 3-yr: +1 bp to 4.47%
  • 5-yr: UNCH at 4.27%
  • 10-yr: -1 bp to 4.25%
  • 30-yr: -2 bps to 4.38%

• News:
  • Germany's Economy Minister Habeck said that the European Union is willing to negotiate the specifics of electric vehicle tariffs with China.
  • European Central Bank policymaker Schnabel said that the central bank will not commit to a specific policy path since there is a potential for price shocks.
  • China's fiscal revenue for the first five months of the year was down 2.8% yr/yr while expenditures were up 3.4%.
  • The Bank of Japan will hold a meeting with bond market participants on July 9 and 10.
  • Japan's Prime Minister Kishida said that gasoline subsidies will be maintained through the end of the year.
  • China's May FDI was down 28.2% YTD (last -27.9%).
  • Singapore's May CPI was up 0.7% m/m (last 0.1%), rising 3.1% yr/yr (expected 3.0%; last 2.7%). May Core CPI was up 3.1% yr/yr (expected 3.0%; last 3.1%).
  • New Zealand's May trade surplus reached NZD204 mln (expected surplus of NZD155 mln; last deficit of NZD3 mln). May Credit Card Spending was unchanged yr/yr (last -0.8%).
  • Germany's June ifo Business Climate hit 88.6 (expected 89.4; last 89.3). June Current Assessment hit 88.3 (expected 89.4; last 89.3) and Business Expectations hit 89.0 (expected 91.0; last 90.3).
  • U.K.'s June CBI Industrial Trends Orders improved to -18 from -33 (expected -26).
• Commodities:
  • WTI crude: +1.2% to $81.63/bbl
  • Gold: +0.5% to $2343.80/ozt
  • Copper: -0.2% to $4.43/lb
• Currencies:
  • EUR/USD: +0.4% to 1.0735
  • GBP/USD: +0.4% to 1.2689
  • USD/CNH: -0.1% to 7.2824
  • USD/JPY: -0.1% to 159.65
• The Day Ahead:
  • 9:00 ET: April FHFA Housing Price Index (prior 0.1%) and April S&P Case-Shiller Home Price Index (Briefing.com consensus 6.9%; prior 7.4%)
  • 10:00 ET: June Consumer Confidence (Briefing.com consensus 100.0; prior 102.0)
• Treasury Auctions:
  • 13:00 ET: $69 bln 2-yr Treasury note auction results