Bond Market Update

Extending Post-FOMC Gains

• U.S. Treasuries are on track for a higher start after rising in the overnight futures market. Treasury futures continued climbing after yesterday's cash close, extending to fresh highs during the European session. Global equity markets have had a mixed showing with Asian technology stocks and European banks showing relative weakness. Economic data released overnight included weak employment figures from Australia and renewed growth in New Zealand after two quarters of contraction. In the U.S., participants will receive the latest weekly Initial Claims report (Briefing.com consensus 220,000; prior 220,000) at 8:30 ET. Crude oil is little changed while the U.S. Dollar Index is up 0.5% at 103.92.
• Yield Check:
  • 2-yr: -4 bps to 3.94%
  • 3-yr: -4 bps to 3.92%
  • 5-yr: -5 bps to 3.98%
  • 10-yr: -6 bps to 4.20%
  • 30-yr: -6 bps to 4.51%

• News:
  • The People's Bank of China made no changes to its one-year and five-year loan prime rates.
  • The Swiss National Bank lowered its policy rate by 25 basis points to 0.25%.
  • Sweden's Riksbank left its policy rate at 2.25%.
  • European Central Bank President Lagarde warned that a U.S.-EU trade war could cut eurozone growth by 0.3 percentage points.
  • France announced plans to spend EUR5 billion on defense.
  • Hong Kong's February CPI was down 0.1% m/m (last 0.4%) but up 1.4% yr/yr (expected 1.8%; last 2.0%).
  • Australia's February employment decreased by 52,800 (expected 30,800; last 30,500) and full employment decreased by 35,700 (last 36,900). February Unemployment Rate remained at 4.1%, as expected, and Participation Rate fell to 66.8% from 67.2% (expected 67.3%).
  • New Zealand's Q4 GDP expanded 0.7% qtr/qtr (expected 0.4%; last -1.1%) but was down 1.1% yr/yr (expected -1.4%; last -1.6%). Q4 GDP Expenditure was up 0.8% qtr/qtr (last -0.9%). Q1 Westpac Consumer Sentiment fell to 89.2 from 97.5.
  • Eurozone's January Construction Output was up 0.2% m/m (last 0.4%).
  • Germany's February PPI was down 0.2% m/m (expected 0.2%; last -0.1%) but up 0.7% yr/yr (expected 1.0%; last 0.5%).
  • U.K.'s January Average Earnings Index + Bonus increased 5.8% yr/yr, as expected (last 6.1%). January three-month employment increased by 144,000 (expected 95,000; last 107,000) and January Unemployment Rate remained at 4.4%, as expected. February Claimant Count increased by 44,200 (expected 7,900; last 2,800).
  • Swiss February trade surplus reached CHF4.803 bln (expected surplus of CHF5.010 bln; last surplus of CHF6.148 bln).
• Commodities:
  • WTI Crude: +0.3% to $67.35/bbl
  • Gold: -0.1% to $3038.80/ozt
  • Copper: +0.1% to $5.107/lb
• Currencies:
  • EUR/USD: -0.5% to 1.0847
  • GBP/USD: -0.3% to 1.2960
  • USD/CNH: +0.3% to 7.2479
  • USD/JPY: -0.2% to 148.47
• Data out Today:
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 220,000; prior 220,000), Continuing Claims (prior 1.870 mln), Q4 Current Account Balance (Briefing.com consensus -$334.0 bln; prior -$131.4 bln), and March Philadelphia Fed Survey (Briefing.com consensus 10.0; prior 18.1)
  • 10:00 ET: February Existing Home Sales (Briefing.com consensus 3.95 mln; prior 4.08 mln) and February Leading Indicators (Briefing.com consensus -0.2%; prior -0.3%)
  • 10:30 ET: Weekly natural gas inventories (prior -62 bcf)