Bond Market Update

 Long End Slightly Ahead

• U.S. Treasuries are on track for a slightly higher start in longer tenors, looking to add to their gains from yesterday. Treasury futures began inching higher in early evening action, remaining near their best levels through the night. There was some ongoing political uncertainty in Japan with reports suggesting that some opposition parties would like to see a different prime minister than recently elected LDP leader Sanae Takaichi. China's CPI was cooler than expected once again in the reading for September (0.1%; expected 0.2%) while inflation readings from France and Spain showed monthly deflation, but accelerating year-over-year rates. Today's upcoming economic data will be limited to the 8:30 ET release of the Empire State Manufacturing survey (Briefing.com consensus -1.8; prior -8.7) for October. Crude oil holds a modest gain while the U.S. Dollar Index is down 0.2% at 98.84.
• Yield Check:
  • 2-yr: UNCH at 3.48%
  • 3-yr: UNCH at 3.48%
  • 5-yr: UNCH at 3.60%
  • 10-yr: -1 bp to 4.01%
  • 30-yr: -1 bp to 4.61%

• News:
  • South Korea's national security office met to discuss ensuring a stable supply of rare earth elements.
  • Standard & Poor's affirmed New Zealand's AA+ rating.
  • French Prime Minister Lecornu will reportedly abandon pension reform plans in an attempt to appease his opposition.
  • British Chancellor Reeves said that she is considering tax hikes and spending cuts in the upcoming Autumn budget.
  • China's September CPI was up 0.1% m/m (expected 0.2%; last 0.0%) but down 0.3% yr/yr (expected -0.2%; last -0.4%). September PPI was down 2.3% yr/yr, as expected (last -2.9%). September New Loans reached CNY1.290 bln (expected CNY1.460 bln; last CNY590 bln), September outstanding loans grew 6.6% yr/yr (expected 6.7%; last 6.8%), and September total social financing reached CNY3.53 trln (expected CNY3.32 trln; last CNY2.57 trln).
  • Japan's August Industrial Production was down 1.5% m/m (expected -1.2%; last -1.2%) and Capacity Utilization was down 2.3% m/m (last -1.1%).
  • South Korea's September trade surplus reached $9.53 bln (expected surplus of $9.56 bln; last surplus of $6.51 bln) as imports grew 8.2% yr/yr, as expected (last -4.1%) and exports rose 12.6% yr/yr (expected 12.7%; last 1.2%).
  • Australia's September MI Leading Index was unchanged m/m (last -0.1%).
  • Eurozone's August Industrial Production was down 1.2% m/m (expected -1.6%; last 0.5%) but up 1.1% yr/yr (last 2.0%).
  • France's September CPI was down 1.0% m/m, as expected (last 0.4%) but up 1.2% yr/yr, as expected (last 0.9%).
  • Spain's September CPI was down 0.3% m/m (expected -0.4%; last 0.0%) but up 3.0% yr/yr (expected 2.9%; last 2.7%). September Core CPI was up 2.4% yr/yr (expected 2.3%; last 2.4%).
• Commodities:
  • WTI Crude: +0.3% to $58.86/bbl
  • Gold: +1.2% to $4214.00/ozt
  • Copper: +0.4% to $5.04/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1628
  • GBP/USD: +0.3% to 1.3356
  • USD/CNH: -0.1% to 7.1308
  • USD/JPY: -0.2% to 151.40
• Data out Today:
  • 7:00 ET: Weekly MBA Mortgage Index (actual -1.8%; prior -4.7%)
  • 8:30 ET: October Empire State Manufacturing survey (Briefing.com consensus -1.8; prior -8.7)
  • 10:30 ET: Weekly crude oil inventories (prior +3.72 mln)
  • 14:00 ET: October Beige Book