Bond Market Update

Inching Higher Ahead of Jobs Report

• U.S. Treasuries are on track for a higher start after three days of losses in longer tenors. The market is likely to see some early volatility once the Employment Situation Report for February (Briefing.com consensus 159,000; prior 143,000) crosses the wires at 8:30 ET. Treasury futures climbed during the Asian session, which saw weakness in equity markets, followed by a pullback from highs over the past few hours. China reported a larger-than-expected trade surplus for February, but that was owed to imports unexpectedly decreasing while export growth was below expectations. Crude oil is making another attempt at rising off this year's low while the U.S. Dollar Index is down 0.3% at 103.75.
• Yield Check:
  • 2-yr: -2 bps to 3.95%
  • 3-yr: -2 bps to 3.96%
  • 5-yr: -2 bps to 4.04%
  • 10-yr: -3 bps to 4.26%
  • 30-yr: -2 bps to 4.56%

• News:
  • Japan's largest trade union is seeking a 6.09% general wage hike for the year, up from last year's 5.85% increase, which was the biggest in more than 20 years. On a related note, there was speculation that the Bank of Japan will announce another rate hike at the end of April after a pause in March.
  • Bank of England policymaker Mann argued against cutting rates in a gradual fashion.
  • European Central Bank policymaker Villeroy de Galhau said that the battle with inflation is being won.
  • China's February trade surplus reached $170.52 bln (expected $147.50 bln; last $104.84 bln) as imports fell 8.4% yr/yr (expected 1.0%; last 1.0%) and exports rose 2.3% yr/yr (expected 5.0%; last 10.7%). February FX Reserves reached $3.227 trln (expected $3.220 trln; last $3.209 trln).
  • South Korea's January Current Account surplus reached $2.94 bln (last surplus of $12.37 bln).
  • Eurozone's Q4 GDP expanded 0.2% qtr/qtr (expected 0.1%; last 0.4%), growing 1.2% yr/yr (expected 0.9%; last 0.9%). Q4 Employment increased by 0.7% yr/yr (expected 0.6%; last 1.0%).
  • Germany's January Factory Orders were down 7.0% m/m (expected -2.4%; last 5.9%).
  • U.K.'s February Halifax House Price Index was down 0.1% m/m (expected 0.5%; last 0.6%) but up 2.9% yr/yr (expected 3.1%; last 2.9%).
  • France's January trade deficit reached EUR6.5 bln (expected deficit of EUR4.1 bln; last deficit of EUR3.5 bln). January Current Account deficit reached EUR2.20 bln (last surplus of EUR2.60 bln).
  • Spain's January Industrial Production was down 1.0% yr/yr (last 2.0%).
• Commodities:
  • WTI Crude: +1.4% to $67.28/bbl
  • Gold: +0.1% to $2928.90/ozt
  • Copper: -1.3% to $4.745/lb
• Currencies:
  • EUR/USD: +0.6% to 1.0848
  • GBP/USD: +0.2% to 1.2904
  • USD/CNH: -0.1% to 7.2362
  • USD/JPY: -0.2% to 147.69
• Data out Today:
  • 8:30 ET: February Nonfarm Payrolls (Briefing.com consensus 159,000; prior 143,000), Nonfarm Private Payrolls (Briefing.com consensus 145,000; prior 111,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.5%), Unemployment Rate (Briefing.com consensus 4.0%; prior 4.0%), and Average Workweek (Briefing.com consensus 34.2; prior 34.1)
  • 15:00 ET: January Consumer Credit (prior $40.8 bln)