Bond Market Update

Quiet Start Ahead

• U.S. Treasuries are on track for a modestly lower start in shorter tenors while the long bond is expected to show some early relative strength. Treasury futures saw minimal movement in early evening action, but slowly retreated to lows once the focus shifted to Europe. Global equity markets started the week in a mostly positive fashion while sovereign debt has faced some pressure alongside U.S. Treasuries. In trade news, the office of the U.S. Trade Representative has prepared a framework for streamlining talks with 18 countries, though the countries have not been specified. The U.S. session will not see any data today, but the rest of the week will see the release of advance Q1 GDP (Briefing.com consensus 0.4%; prior 2.4%) on Wednesday morning and April Nonfarm Payrolls (Briefing.com consensus 130,000; prior 228,000) on Friday. Crude oil is under pressure while the U.S. Dollar Index is up 0.2% at 99.67.
• Yield Check:
  • 2-yr: +1 bp to 3.77%
  • 3-yr: +1 bp to 3.77%
  • 5-yr: +2 bps to 3.90%
  • 10-yr: +1 bp to 4.28%
  • 30-yr: UNCH at 4.74%

• News:
  • The People's Bank of China reassured that the reserve requirement ratio and interest rates will be lowered at the appropriate time.
  • China is reportedly looking to consolidate more than 200 of its semiconductor companies into ten big entities.
  • Australia's Labor party is leading ahead of next weekend's election, but ratings agencies have said that the party's spending plan will put the country's AAA credit rating in jeopardy.
  • French officials ruled out pushing for a broad EU-U.S. free trade deal in the short term.
  • European Central Bank policymaker Villeroy de Galhau stated that the central bank has room for further rate cuts as inflation nears target and suggested Europe could become an "anchor of stability" amid U.S. volatility.
  • China's March Industrial Profit was up 0.8% YTD (last -0.3%).
  • Hong Kong's March trade deficit reached $45.4 bln (last deficit of $36.3 bln) as imports grew 16.6% m/m (last 11.8%) and exports rose 18.5% m/m (last 15.4%).
  • India's March Industrial Production was up 3.0% yr/yr (expected 3.3%; last 2.9%) and Manufacturing Production was up 3.0% m/m (last 2.9%).
  • Singapore's Q1 Unemployment Rate rose to 2.1% from 1.9%.
  • U.K.'s April CBI Distributive Trades Survey rose to -8 from -41 (expected -21).
  • Spain's March Retail Sales rose 3.6% yr/yr (last 3.6%) and Q1 Unemployment Rate rose to 11.36% from 10.61% (expected 10.70%).
• Commodities:
  • WTI Crude: -0.3% to $62.83/bbl
  • Gold: +0.2% to $3304.30/ozt
  • Copper: -0.3% to $4.828/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1353
  • GBP/USD: +0.2% to 1.3338
  • USD/CNH: +0.1% to 7.2973
  • USD/JPY: -0.2% to 143.38
• No Data on Today's Schedule