Bond Market Update

Reversing Recent Gains

• U.S. Treasuries are on track for a lower start that will reverse a good chunk of last week's advance in the 10-yr note and shorter tenors. Treasury futures began slipping last evening, staying under steady pressure as the night went on. The market received flash Manufacturing and Services PMI readings from major economies with Japan's Flash Manufacturing PMI (48.3; prior 49.0) showing a deepening contraction while readings from Australia (52.6; prior 50.4) and India (57.6; prior 56.3) showed an acceleration in activity. Meanwhile, the eurozone's Manufacturing PMI (48.7; expected 48.3; prior 47.6) showed a deceleration in the pace of contraction. The U.S. session will also feature the release of flash Manufacturing and Services PMI readings at 9:45 ET and there will be no other data today. Crude oil is on the rise while the U.S. Dollar Index is down 0.1% at 103.98.
• Yield Check:
  • 2-yr: +5 bps to 4.00%
  • 3-yr: +5 bps to 3.98%
  • 5-yr: +5 bps to 4.06%
  • 10-yr: +5 bps to 4.30%
  • 30-yr: +3 bps to 4.63%

• News:
  • Bank of Japan Governor Ueda said that another rate hike is likely if inflation nears the 2.0% target.
  • Reserve Bank of Australia Governor Bullock would not commit to additional rate cuts.
  • European Central Bank policymaker Cipollone said that inflation may return to target sooner than it was previously expected while ECB President Lagarde said that the central bank is ready to adjust rates if inflationary pressures shift.
  • Bank of England Governor Bailey said that rate cuts remain on the table.
  • Japan's flash March Manufacturing PMI hit 48.3 (expected 49.2; last 49.0) and flash Services PMI hit 49.5 (last 53.7).
  • India's flash March Manufacturing PMI hit 57.6 (last 56.3) and flash Services PMI hit 57.7 (last 59.0).
  • Singapore's February CPI was up 0.8% m/m (last -0.8%), rising 0.9% yr/yr (expected 1.0%; last 1.2%). February Core CPI was up 0.6% yr/yr (expected 0.7%; last 0.8%).
  • Australia's flash March Manufacturing PMI hit 52.6 (last 50.4) and flash March Services PMI hit 51.2 (last 50.8). 
  • Eurozone's flash March Manufacturing PMI hit 48.7 (expected 48.3; last 47.6) and flash Services PMI hit 50.4 (expected 51.2; last 50.6).
  • Germany's flash March Manufacturing PMI hit 48.3 (expected 47.1; last 46.5) and flash Services PMI hit 50.2 (expected 52.3; last 51.1).
  • U.K.'s flash March Manufacturing PMI hit 44.6 (expected 47.3; last 46.9) and flash Services PMI hit 53.2 (expected 51.2; last 51.0).
  • France's flash March Manufacturing PMI hit 48.9 (expected 46.2; last 45.8) and flash Services PMI hit 46.6 (expected 46.3; last 45.3).
• Commodities:
  • WTI Crude: +0.8% to $68.82/bbl
  • Gold: +0.3% to $3030.20/ozt
  • Copper: +1.2% to $5.173/lb
• Currencies:
  • EUR/USD: +0.2% to 1.0838
  • GBP/USD: +0.3% to 1.2952
  • USD/CNH: +0.1% to 7.2593
  • USD/JPY: +0.3% to 149.76
• Data out Today:
  • 9:45 ET: Flash March S&P Global U.S. Manufacturing PMI (prior 52.7) and flash March S&P Global U.S. Services PMI (prior 51.0)