Bond Market Update

Attempting Another Pullback

• U.S. Treasuries are on track for a lower start after six days of gains. Treasury futures dipped in early evening action, adding to their losses during the European session, which has seen some pressure on investor sentiment after President Trump threatened to impose a 25% tariff on imports from Europe. Economic data released overnight included weak capital expenditure numbers for Q4 from Australia ahead of next week's release of Q4 GDP. In Europe, the latest Business and Consumer Survey for the eurozone (96.3; prior 95.3) showed some improvement. Crude oil is rising off its lowest level of the year while the U.S. Dollar Index is up 0.2% at 106.61.
• Yield Check:
  • 2-yr: +2 bps to 4.09%
  • 3-yr: +3 bps to 4.07%
  • 5-yr: +4 bps to 4.12%
  • 10-yr: +4 bps to 4.29%
  • 30-yr: +4 bps to 4.55%

• News:
  • China Securities Regulatory Commission has slowed approvals for U.S. IPOs of Chinese companies.
  • Bank of Thailand announced a surprise 25-basis point rate cut to 2.00%.
  • European Central Bank policymaker Stournaras said that it is too early to talk about a pause in the cutting cycle since rates remain restrictive.
  • Australia's Q4 Building Capital Expenditure increased 0.2% qtr/qtr (last 1.1%) and Plant/Machinery Expenditure decreased 0.8% qtr/qtr (last 1.3%). Q4 Private New Capital Expenditure was down 0.2% qtr/qtr (expected 0.6%; last 1.6%).
  • New Zealand's February ANZ Business Confidence rose to 58.4 from 54.4.
  • Eurozone's February Business and Consumer Survey rose to 96.3 from 95.3 (expected 96.0). January M3 Money Supply grew 3.6% yr/yr (expected 3.8%; last 3.5%), January Private Sector Loans rose 1.3% yr/yr (expected 1.2%; last 1.1%) and loans to nonfinancials were up 2.0% yr/yr (last 1.5%).
  • France's January PPI was up 0.7% m/m (last 0.9%) but down 2.1% yr/yr (last -3.8%). January jobseekers rose to 3.162 mln from 2.957 mln.
  • Italy's February Business Confidence rose to 87.0 from 86.8, as expected,and Consumer Confidence rose to 98.8 from 98.2 (expected 98.4). December Industrial Sales were down 2.7% m/m (last 1.4%), falling 7.2% yr/yr (last -2.5%).
  • Spain's flash February CPI was up 0.4% m/m (expected 0.3%; last 0.2%), rising 3.0% yr/yr, as expected (last 2.9%).
  • Swiss Q4 GDP was up 0.2% qtr/qtr, as expected (last 0.4%), growing 1.5% yr/yr (expected 1.6%; last 1.9%).
• Commodities:
  • WTI Crude: +1.1% to $69.37/bbl
  • Gold: -1.1% to $2898.10/ozt
  • Copper: +1.1% to $4.589/lb
• Currencies:
  • EUR/USD: -0.1% to 1.0478
  • GBP/USD: UNCH at 1.2672
  • USD/CNH: UNCH at 7.2673
  • USD/JPY: +0.4% to 149.58
• Data out Today: 
  • 8:30 ET: Q4 GDP -- second estimate (Briefing.com consensus 2.3%; prior 2.3%), Q4 GDP Deflator -- second estimate (Briefing.com consensus 2.2%; prior 2.2%), weekly Initial Claims (Briefing.com consensus 220,000; prior 219,000) and Continuing Claims (prior 1.869 mln), and January Durable Orders (Briefing.com consensus 1.8%; prior -2.2%), and Durable Orders ex-transportation (Briefing.com consensus 0.4%; prior 0.3%)
  • 10:00 ET: January Pending Home Sales (Briefing.com consensus -0.8%; prior -5.5%)
  • 10:30 ET: Weekly natural gas inventories (prior -196 bcf)