Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a modestly lower start after yesterday's steady advance. Treasury futures inched higher during the early portion of the Asian session but the gains faded as the night went on while other sovereign debt has also faced some pressure. Japanese press reported that a meeting of G7 finance ministers and central bankers is being organized for April 23 ahead of an official meeting that is scheduled for late May. In Europe, Germany's ZEW economic sentiment fell to -14.0 from 51.6 due to worries about the impact of U.S. trade policy. The U.S. session will see a relatively light flow of economic data with the April Empire State Manufacturing survey (Briefing.com consensus -14.8; prior -20.0) and March Import/Export prices set to be released at 8:30 ET. Crude oil is slipping while the U.S. Dollar Index is up 0.2% at 99.82.
• Yield Check:
  • 2-yr: +1 bp to 3.84%
  • 3-yr: UNCH at 3.86%
  • 5-yr: +1 bp to 4.01%
  • 10-yr: +2 bps to 4.38%
  • 30-yr: +2 bps to 4.82%

• News:
  • Treasury Secretary Bessent said last evening that Treasury buybacks could be increased.
  • There was ongoing speculation that the People's Bank of China will step in to support markets in some way.
  • UBS lowered its forecast for China's 2025 GDP to 3.4% from 4.0%.
  • The Reserve Bank of Australia released its March Minutes, showing an agreement that it was premature to cut at that meeting, but the likelihood of a cut in May is now on the rise.
  • The latest ECB bank lending survey showed a slight tightening in credit access for businesses in the first quarter due to heightened economic risks.
  • South Korea's February M2 Money Supply rose 5.6% (last 5.7%).
  • India's March WPI Inflation was up 2.05% yr/yr (expected 2.50%; last 2.38%) and March CPI was up 3.34% yr/yr (expected 3.60%; last 3.61%). March trade deficit reached $21.54 bln (last deficit of $14.05 bln).
  • New Zealand's March FPI was up 0.5% m/m (last -0.5%).
  • Eurozone's February Industrial Production rose 1.1% m/m (expected 0.1%; last 0.6%), growing 1.2% yr/yr (expected -0.8%; last -0.5%). April ZEW Economic Sentiment fell to -18.5 from 39.8 (expected 13.2).
  • Germany's March WPI was down 0.2% m/m (expected 0.2%; last 0.6%) but up 1.3% yr/yr (last 1.6%). April ZEW Economic Sentiment fell to -14.0 from 51.6 (expected 10.6) and ZEW Current Conditions ticked up to -81.2 from -87.6 (expected -86.0).
  • U.K.'s February Average Earnings Index + Bonus was up 5.6% yr/yr (expected 5.7%; last 5.6%). February three-month employment increased by 206,000 (last 144,000), and February Unemployment Rate remained at 4.4%, as expected. March Claimant Count increased by 18,700 (expected 30,300; last 16,500).
  • France's final March CPI was up 0.2% m/m, as expected (last 0.0%), rising 0.8% yr/yr, as expected (last 0.8%).
• Commodities:
  • WTI Crude: -0.7% to $61.09/bbl
  • Gold: +0.3% to $3232.80/ozt
  • Copper:-0.3% to $4.612/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1325
  • GBP/USD: +0.4% to 1.3231
  • USD/CNH: +0.1% to 7.3190
  • USD/JPY: UNCH at 142.90
• Data out Today:
  • 8:30 ET: April Empire State Manufacturing (Briefing.com consensus -14.8; prior -20.0), March Export Prices (prior 0.1%), Export Prices ex-agriculture (prior 0.1%), Import Prices (prior 0.4%), and Import Prices ex-oil (prior 0.3%)