Bond Market Update

Bounce Continues

• U.S. Treasuries are on track for a modestly higher start, seeking a continuation of yesterday's morning reversal. Treasury futures continued yesterday's intraday march higher in the overnight market. The advance faced some pressure at the start of the European session, but the market bounced back swiftly. Overnight action saw some pressure on Asian equities amid ongoing focus on tariffs and the Chinese government pledged to stimulate foreign investment. Noteworthy economic data will be limited to the 8:30 ET release of the Philadelphia Fed Survey for February (Briefing.com consensus 20.5; prior 44.3) and weekly Initial Claims (Briefing.com consensus 217,000; prior 213,000). Crude oil is looking for its third consecutive advance while the U.S. Dollar Index is down 0.2% at 106.93.
• Yield Check:
  • 2-yr: -2 bps to 4.25%
  • 3-yr: -3 bps to 4.26%
  • 5-yr: -3 bps to 4.34%
  • 10-yr: -4 bps to 4.50%
  • 30-yr: -3 bps to 4.74%

• News:
  • Treasury Secretary Bessent said that any plan to increase the outstanding share of longer-dated Treasuries is "a long way off," according to Bloomberg.
  • The Chinese government will take steps to stabilize foreign investment, which has been contracting since mid-2023.
  • The People's Bank of China made no changes to its one-year and five-year loan prime rates.
  • Australia reported strong job growth for January, led by an unexpected rise in the participation rate.
  • European Central Bank policymaker Stournaras said that the disinflationary process remains on track.
  • Airbus missed quarterly expectations and issued soft delivery guidance.
  • South Korea's February Consumer Confidence rose to 95.2 from 91.2. January PPI was up 0.6% m/m (last 0.3%), rising 1.7% yr/yr (last 1.7%).
  • Hong Kong's January CPI was up 0.4% m/m (last 0.1%), rising 2.0% yr/yr (expected 1.8%; last 1.4%).
  • Australia's January Employment increased by 44,000 (expected 19,400; last 60,000) and full employment increased by 54,100 (last -23,700). January Unemployment Rate rose to 4.1% from 4.0%, as expected, and Participation Rate rose to 67.3% from 67.2% (expected 67.1%).
  • Eurozone's December Construction Output was unchanged m/m (last 0.6%).
  • Germany's January PPI was down 0.1% m/m (expected 0.6%; last -0.1%) but up 0.5% yr/yr (expected 1.3%; last 0.8%).
  • U.K.'s February CBI Industrial Trends Orders improved to -28 from -34 (expected -30).
  • Swiss January trade surplus reached CHF6.124 bln (expected surplus of CHF3.550 bln; last surplus of CHF3.480 bln).
• Commodities:
  • WTI Crude: +0.3% to $72.48/bbl
  • Gold: +0.8% to $2960.80/ozt
  • Copper: +1.0% to $4.608/lb
• Currencies:
  • EUR/USD: +0.1% to 1.0437
  • GBP/USD: +0.1% to 1.2601
  • USD/CNH: -0.4% to 7.2542
  • USD/JPY: -1.0% to 149.97
• Data out Today:
  • 8:30 ET: February Philadelphia Fed Survey (Briefing.com consensus 20.5; prior 44.3), weekly Initial Claims (Briefing.com consensus 217,000; prior 213,000), and Continuing Claims (prior 1.850 mln)
  • 10:30 ET: Weekly natural gas inventories (prior -100 bcf)
  • 11:00 ET: Weekly crude oil inventories (prior +4.07 mln)