Bond Market Update

Inching Lower as PPI Looms

• U.S. Treasuries are on track for a modestly lower start ahead of the 8:30 ET release of February PPI (Briefing.com consensus 0.3%; prior 0.4%) and Core PPI (Briefing.com consensus 0.3%; prior 0.3%), which will be released alongside the latest weekly Initial Claims report (Briefing.com consensus 228,000; prior 221,000). Treasury futures climbed in early evening action, but retreated alongside other sovereign debt once the focus shifted to Europe. Tariffs remain top of mind after President Trump repeated that reciprocal tariffs will be announced in the near future. Crude oil is facing some early pressure while the U.S. Dollar Index is up 0.1% at 103.74.
• Yield Check:
  • 2-yr: +1 bp to 4.00%
  • 3-yr: +1 bp to 4.00%
  • 5-yr: +1 bp to 4.09%
  • 10-yr: +2 bps to 4.34%
  • 30-yr: +3 bps to 4.66%

• News:
  • China Securities Daily speculated that the yuan could appreciate due to rising asset demand.
  • Morgan Stanley lowered its view of Australian stocks to Underweight.
  • Bank of France lowered its domestic growth forecast for 2025 to 0.7% from 0.9% and cut its inflation outlook to 1.3% from 1.6%.
  • European Central Bank policymaker Nagel said that the EU is right to respond to U.S. tariffs and that a trade could tip Germany back into a recession.
  • Hong Kong's Q4 PPI was up 4.2% yr/yr (last 3.2%) and Q4 Industrial Production was up 0.9% yr/yr (last -0.1%).
  • Australia's January Building Approvals rose 6.3% m/m, as expected (last 0.7%) and Private House Approvals rose 1.1% m/m, as expected (last -3.0%). MI Inflation Expectations slowed to 3.6% from 4.6%.
  • New Zealand's January External Migration & Visitors increased 13.4% m/m (last 12.2%).
  • Eurozone's January Industrial Production was up 0.8% m/m (expected 0.5%; last -0.4%) and was flat yr/yr (expected -0.9%; last -1.5%).
  • Italy's Q4 Unemployment Rate remained at 6.1% (expected 6.2%).
  • Swiss February PPI was up 0.3% m/m (expected 0.2%; last 0.1%) but down 0.1% yr/yr (last -0.3%).
• Commodities:
  • WTI Crude: -0.4% to $67.35/bbl
  • Gold: +0.4% to 2956.90/ozt
  • Copper: -0.2% to $4.839/lb
• Currencies:
  • EUR/USD: -0.2% to 1.0863
  • GBP/USD: -0.2% to 1.2938
  • USD/CNH: +0.1% to 7.2477
  • USD/JPY: -0.1% to 147.98
• Data out Today:
  • 8:30 ET: February PPI (Briefing.com consensus 0.3%; prior 0.4%), Core PPI (Briefing.com consensus 0.3%; prior 0.3%), weekly Initial Claims (Briefing.com consensus 228,000; prior 221,000), and Continuing Claims (prior 1.897 mln)
  • 10:30 ET: Weekly natural gas inventories (prior -80 bcf)
• Treasury Auctions:
  • 13:00 ET: $22 bln 30-yr Treasury bond reopening results