Bond Market Update

Reclaiming Monday Losses

• U.S. Treasuries are on track to recover yesterday's losses in shorter tenors at the open. Treasury futures began rising in early evening action, accelerating their advance during the latter portion of the Asian session. The market has held steady since reaching highs around 4:30 ET. The overnight rally took place alongside gains in other sovereign debt while equity markets have had a generally subdued showing. In Europe, the European Central Bank's lending survey for Q2 showed the first increase in demand for consumer loans since 2022 while Germany's ZEW Economic Sentiment survey recorded the first decrease in economic expectations in a year. Crude oil is falling toward its low from last week while the U.S. Dollar Index is up 0.1% at 104.30 after a brief overnight rise to its 200-day moving average (104.42). Today's economic data will be headlined by the 8:30 ET release of Retail Sales (Briefing.com consensus -0.1%; prior 0.1%) and Retail Sales ex-auto (Briefing.com consensus 0.2%; prior -0.1%) for June.
• Yield Check:
  • 2-yr: -3 bps to 4.42%
  • 3-yr: -4 bps to 4.19%
  • 5-yr: -5 bps to 4.08%
  • 10-yr: -6 bps to 4.17%
  • 30-yr: -5 bps to 4.40%

• News:
  • The People's Bank of China conducted its largest liquidity injection on record, adding CNY733 bln through open market operations.
  • Chinese Insurer Ping An Insurance lost more than 5.0% in Hong Kong after issuing $3.5 bln wort of convertible notes.
  • Expectations for another rate hike rate from the Reserve Bank of Australia have receded significantly in recent weeks.
  • Roberta Metsola will continue leading the European Parliament for the next 2.5 years.
  • Hugo Boss lowered its outlook for the year due to weak sales in China and the United Kingdom.
  • Former President Trump selected Ohio Senator Vance as his running mate.
  • Japan's May Tertiary Industry Activity Index was down 0.4% m/m (expected 0.1%; last 2.2%).
  • South Korea's June Import Price Index was up 9.7% yr/yr (last 4.7%) and Export Price Index was up 12.2% yr/yr (last 7.6%).
  • Eurozone's May trade surplus reached EUR13.9 bln (expected surplus of EUR18.0 bln; last surplus of EUR14.2 bln). July ZEW Economic Sentiment fell to 43.7 from 51.3 (expected 48.1).
  • Germany's July ZEW Economic Sentiment fell to 41.8 from 47.5 (expected 41.2) and Current Conditions improved to -68.9 from -73.8 (expected -74.3).
  • France's May Current Account deficit reached EUR3.10 bln (last deficit of EUR3.50 bln).
  • Italy's June CPI was up 0.1% m/m, as expected (last 0.2%), rising 0.8% yr/yr, as expected (last 0.8%). May trade surplus reached EUR520 mln (last deficit of EUR210 mln).
• Commodities:
  • WTI Crude: -1.6% to $80.57/bbl
  • Gold: +0.6% to $2444.20/ozt
  • Copper: -0.6% to $4.50/lb
• Currencies:
  • EUR/USD: +0.1% to 1.0901
  • GBP/USD: UNCH at 1.2968
  • USD/CNH: +0.1% to 7.2815
  • USD/JPY: +0.2% to 158.36
• Data out Today:
  • 8:30 ET: June Retail Sales (Briefing.com consensus -0.1%; prior 0.1%), Retail Sales ex-auto (Briefing.com consensus 0.2%; prior -0.1%), June Import Prices (prior -0.4%), Import Prices ex-oil (prior -0.3%), Export Prices (prior -0.6%), and Export Prices ex-agriculture (prior -0.8%)
  • 10:00 ET: May Business Inventories (Briefing.com consensus 0.3%; prior 0.3%) and July NAHB Housing Market Index (Briefing.com consensus 44; prior 43)