Bond Market Update

Long End Ahead

• U.S. Treasuries are on track for a modestly higher start with longer tenors expected to show some relative strength after three days of losses. Treasury futures climbed in early evening action before revisiting their lows near the end of the Asian session. The brief dip was followed by a rally to fresh highs with longer tenors pacing the move. Overnight trade saw weakness in Asian equities, followed by a more upbeat session in Europe, while sovereign debt has been on the rise. In the U.S., Vice President Harris reportedly has enough delegate support to be nominated for President from her party. Today's economic data will be limited to the 10:00 ET release of June Existing Home Sales (Briefing.com consensus 4.00 mln; prior 4.11 mln). Later in the day, the U.S. Treasury will sell $69 bln in 2-yr notes. Crude oil holds a modest loss while the U.S. Dollar Index is up 0.1% at 104.42.
• Yield Check:
  • 2-yr: -1 bp to 4.51%
  • 3-yr: -2 bps to 4.28%
  • 5-yr: -2 bps to 4.16%
  • 10-yr: -3 bps to 4.23%
  • 30-yr: -3 bps to 4.45%

• News:
  • Press reports suggested that Japanese officials are considering a minimum wage hike.
  • China is attempting to mediate the Israel-Hamas conflict.
  • India's government presented a full budget for 2024, which includes higher capital gains taxes.
  • There is some uncertainty about the likelihood of a rate hike at next week's policy meeting at the Bank of Japan.
  • European Central Bank policymaker De Guindos said that September is a more convenient time for decision making.
  • France is likely to remain without a full-time prime minister until the conclusion of the Olympic Games in mid-August.
  • Japan's May BoJ Core CPI was up 2.1% yr/yr (last 2.1%).
  • South Korea's June PPI was down 0.1% m/m (last 0.1%) but up 2.5% yr/yr (last 2.3%).
  • Singapore's June CPI was down 0.2% m/m (last 0.7%) but up 2.4% yr/yr (expected 2.7%; last 3.1%). June Core CPI was up 2.9% yr/yr (expected 3.0%; last 3.1%).
• Commodities:
  • WTI Crude: -0.6% to $77.94/bbl
  • Gold: +0.6% to $2410.00/ozt
  • Copper: -0.6% to $4.174/lb
• Currencies:
  • EUR/USD: -0.3% to 1.0857
  • GBP/USD: -0.2% o 1.2911
  • USD/CNH: -0.1% to 7.2891
  • USD/JPY: -0.5% to 156.15
• Data out Today:
  • 10:00 ET: June Existing Home Sales (Briefing.com consensus 4.00 mln; prior 4.11 mln)
• Treasury Auctions:
  • 13:00 ET: $69 bln 2-yr Treasury note auction results