Bond Market Update

Padding Recent Gains

• U.S. Treasuries are on track for a modestly higher start, seeking their fourth consecutive day of gains. Treasury futures faced some light pressure during the Asian session, which featured the release of Japan's February CPI report. The report showed a deceleration in the headline yr/yr rate to 3.7% from 4.0% while National Core CPI decelerated to 3.0% from 3.2% against expectations for a bigger slowdown. Treasuries bounced during the European session, rising to fresh highs alongside other sovereign debt. The market will not receive any data today. Crude oil is giving back some of yesterday's advance while the U.S. Dollar Index is flat at 103.87.
• Yield Check:
  • 2-yr: -2 bps to 3.94%
  • 3-yr: -2 bps to 3.91%
  • 5-yr: -3 bps to 3.98%
  • 10-yr: -2 bps to 4.21%
  • 30-yr: -2 bps to 4.54%

• News:
  • Foreign investors bought JPY3.4 trln worth of Japanese bonds last week by using proceeds from stock sales.
  • Indonesia's equity market saw a continuation of its recent weakness amid calls for a strengthening of the country's central bank.
  • South Korea's opposition party called for the impeachment of acting President Choi.
  • Germany's upper house approved a borrowing increase and a EUR500 bln infrastructure and defense spending fund.
  • Japan's February National CPI was down 0.1% m/m (last 0.5%) but up 3.7% yr/yr (last 4.0%). February National Core CPI was up 3.0% yr/yr (expected 2.9%; last 3.2%).
  • South Korea's February PPI was unchanged m/m (last 0.6%), rising 1.5% yr/yr (last 1.8%).
  • New Zealand's February trade surplus reached NZD510 mln (expected deficit of NZD235 mln; last deficit of NZD544 mln). February Credit Card Spending was up 0.9% yr/yr (last 1.3%).
  • Eurozone's January Current Account surplus reached EUR35.4 bln (last surplus of EUR38.4 bln).
  • U.K.'s February Public Sector Net Borrowing reached GBP10.71 bln (expected GBP7.00 bln; last -GBP13.32 bln). CBI Industrial Trends Orders Index fell to -29 from -28 (expected -30).
  • France's March Business Survey fell to 96 from 97 (expected 97).
• Commodities:
  • WTI Crude: -0.4% to $67.79/bbl
  • Gold: UNCH at $3044.20/ozt
  • Copper: -1.1% to $5.058/lb
• Currencies:
  • EUR/USD: UNCH at 1.0852
  • GBP/USD: -0.2% to 1.2946
  • USD/CNH: UNCH at 7.2508
  • USD/JPY: +0.1% to 148.87
• No Data on Today's Schedule