Bond Market Update

Looking to Bounce

• U.S. Treasuries are on track for a modestly higher start after two days of losses that lifted the 30-yr yield toward its high from January (5.005%). Treasury futures climbed in early evening trade, followed by sideways action during the Asian session. The market extended to fresh highs a couple hours ago alongside slim gains in European sovereign debt. The overnight data flow featured smaller than expected April social financing figures from China while final April CPI readings from Germany (0.4%) and Spain (0.6%) matched expectations. The market will not receive any top-tier U.S. data today but tomorrow will bring a heavy batch of economic news, including April PPI (Briefing.com consensus 0.3%; prior -0.4%) and Retail Sales (Briefing.com consensus 0.2%; prior 1.4%). Crude oil is giving back some of its recent advance while the U.S. Dollar Index is down 0.4% at 100.56.
• Yield Check:
  • 2-yr: -1 bp to 4.01%
  • 3-yr: -2 bps to 3.99%
  • 5-yr: -2 bps to 4.10%
  • 10-yr: -3 bps to 4.47%
  • 30-yr: -3 bps to 4.91%

• News:
  • China Securities Journal reported that stock buybacks by Chinese companies increased in April.
  • Korea Development Institute lowered its domestic growth forecast for 2025 to 0.8% from 1.6%.
  • China's April New Loans reached CNY280.0 bln (expected CNY710.0 bln; last CNY3.64 trln), April Outstanding Loans grew 7.2% yr/yr (expected 7.4%; last 7.4%), and April total social financing reached CNY1.16 trln (expected CNY1.22 trln; last CNY5.89 trln).
  • Japan's April PPI was up 0.2% m/m, as expected (last 0.4%), rising 4.0% yr/yr, as expected (last 4.3%).
  • South Korea's April Unemployment Rate fell to 2.7% from 2.9%. 
  • India's April WPI Inflation was up 0.85% yr/yr (expected 1.76%; last 2.05%).
  • Australia's Q1 Wage Price Index was up 0.9% qtr/qtr (expected 0.8%; last 0.7%), rising 3.4% yr/yr (expected 3.2%; last 3.2%).
  • New Zealand's April Electronic Card Retail Sales were unchanged m/m (last -0.8%), falling 0.3% yr/yr (last -1.6%).
  • Germany's April CPI was up 0.4% m/m, as expected (last 0.3%), rising 2.1% yr/yr, as expected (last 2.2%).
  • Spain's April CPI was up 0.6% m/m, as expected (last 0.1%), rising 2.2% yr/yr, as expected (last 2.3%). April Core CPI was up 2.4% yr/yr, as expected (last 2.0%).
• Commodities:
  • WTI Crude: -1.1% to $62.97/bbl 
  • Gold: -0.5% to $3233.10/ozt
  • Copper: -0.3% to $4.708/lb
• Currencies:
  • EUR/USD: +0.3% to 1.1211
  • GBP/USD: +0.2% to 1.3332
  • USD/CNH: +0.1% to 7.2019
  • USD/JPY: -0.9% to 146.19
• Data out Today: 
  • 7:00 ET: Weekly MBA Mortgage Index (actual 1.1%; prior 11.0%)
  • 10:30 ET: Weekly crude oil inventories (prior -1.11 mln)