Bond Market Update

Pulling Back

• U.S. Treasuries are on track to give back some of their gains from the past two days at the open after a night that saw some pressure in the futures market. Treasury futures inched down in early evening action, maintaining a narrow range until the end of the Asian session, when action fell to fresh lows. Treasuries have remained pressured since about 3:00 ET, which leaves them at their lowest levels of the night. The overnight session featured the release of flash August Manufacturing and Services PMIs from major economies with Manufacturing readings from Japan (49.5), Australia (48.7), Germany (42.1) and France (42.1) remaining in contraction while readings from India (57.9) and the U.K. (52.5) pointed to ongoing expansion. Meanwhile, Services reading from all these economies remained above 50.0. Economic data during the U.S. will include weekly initial claims (Briefing.com consensus 225,000) at 8:30 ET, flash Manufacturing and Services PMIs at 9:45 ET, and July Existing Home Sales (Briefing.com consensus 3.90 mln) at 10:00 ET. Crude oil is recovering some of yesterday's loss while the U.S. Dollar Index is up 0.3% at 101.33.
• Yield Check:
  • 2-yr: +5 bps to 3.97%
  • 3-yr: +5 bps to 3.78%
  • 5-yr: +6 bps to 3.70%
  • 10-yr: +5 bps to 3.83%
  • 30-yr: +6 bps to 4.11%

• News:
  • The Bank of Korea left its repurchase rate at 3.50%, as expected, and lowered its 2024 CPI forecast to 2.5% from 2.6%.
  • Bank of Japan Governor Ueda will take part in a parliamentary Q&A session tomorrow.
  • China's Commerce Ministry has launched an anti-subsidy probe into dairy imports from the EU.
  • Federal and state tax revenue in Germany was down 7.9% yr/yr this year.
  • Norway's central bank raised its one-year inflation outlook to 3.1% from 2.8% while the 2-3 year outlook was increased to 4.1% from 4.0%.
  • Japan's flash August Manufacturing PMI hit 49.5 (expected 49.8; last 49.1) and flash Services PMI hit 54.0 (last 53.7).
  • India's flash August Manufacturing PMI hit 57.9 (last 58.1) and flash Services PMI hit 60.4 (last 60.3).
  • Australia's flash August Manufacturing PMI hit 48.7 (last 47.5) and flash Services PMI hit 52.2 (last 50.4).
  • Eurozone's flash August Manufacturing PMI hit 45.6 (expected 45.7; last 45.8) and flash Services PMI hit 53.3 (expected 51.7; last 51.9).
  • Germany's flash August Manufacturing PMI hit 42.1 (expected 43.4; last 43.2) and flash Services PMI hit 51.4 (expected 52.3; last 52.5).
  • U.K.'s flash August Manufacturing PMI hit 52.5 (expected 52.1; last 52.1) and flash Services PMI hit 53.3 (expected 52.8; last 52.5). August CBI Industrial Trends Orders rose to -22 from -32 (expected -26).
  • France's flash August Manufacturing PMI hit 42.1 (expected 44.4; last 44.0) and flash Services PMI hit 55.0 (expected 50.2; last 50.1).
• Commodities:
  • WTI Crude: +0.5% to $72.25/bbl
  • Gold: -0.4% to $2537.00/ozt
  • Copper: -0.9% to $4.154/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1136
  • GBP/USD: +0.2% to 1.3110
  • USD/CNH: +0.1% to 7.1387
  • USD/JPY: +0.6% to 146.04
• Data out Today:
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 225,000; prior 227,000) and Continuing Claims (prior 1.864 mln)
  • 9:45 ET: Flash August S&P Global U.S. Manufacturing PMI (prior 49.6) and flash August S&P Global U.S. Services PMI (prior 55.0)
  • 10:00 ET: July Existing Home Sales (Briefing.com consensus 3.90 mln; prior 3.89 mln)
  • 10:30 ET: Weekly natural gas inventories (prior -6 bcf)