Bond Market Update

April Jobs Report Ahead

• U.S. Treasuries are on track to show some early strength in longer tenors, but the entire complex is likely to see significant movement once the Employment Situation report for April (Briefing.com consensus 130,000; prior 228,000) crosses the wires at 8:30 ET. As usual, the market will be interested in seeing the Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.3%) component in addition to the headline growth figures. Treasury futures slumped during the early portion of the Asian session before spending the rest of the night in a slow recovery. China acknowledged that it is conducting an assessment regarding trade negotiations with the United States and there was some renewed caution about the near-term likelihood of additional rate cuts from the European Central Bank after eurozone's core CPI accelerated to 2.7% yr/yr in the flash reading for April from 2.4% in March. Crude oil is giving back some of yesterday's gain while the U.S. Dollar Index is down 0.5% at 99.74.
• Yield Check:
  • 2-yr: UNCH at 3.70%
  • 3-yr: +2 bps to 3.70%
  • 5-yr: UNCH at 3.81%
  • 10-yr: -1 bp to 4.22%
  • 30-yr: -2 bps to 4.72%

• News:
  • Japan's Prime Minister Ishiba said that his country's negotiations with the U.S. have not produced common ground yet while Japan's Finance Minister Kato said that Japan's U.S. Treasury holdings will be a card in negotiations.
  • EU Commissioner for Trade Sefcovic reportedly proposed buying more U.S. goods to reduce the EU's trade surplus with the U.S.
  • Japan's March jobs/applications ratio rose to 1.26 from 1.24 (expected 1.25). March Unemployment Rate rose to 2.5% from 2.4% (expected 2.4%). April Monetary Base was down 5.1% yr/yr (expected -2.0%; last -3.2%).
  • South Korea's April CPI was up 0.1% m/m, as expected (last 0.2%), rising 2.1% yr/yr, as expected (last 2.1%). April Manufacturing PMI hit 47.5 (last 49.1).
  • India's April Manufacturing PMI hit 58.2 (expected 58.4; last 58.1).
  • Hong Kong's March Retail Sales were down 3.5% yr/yr (last -13.0%). Q1 GDP expanded 2.0% qtr/qtr (last 0.8%), growing 3.1% yr/yr (last 2.4%).
  • Australia's Q1 PPI was up 0.9% qtr/qtr (expected 0.8%; last 0.8%), rising 3.7% yr/yr (last 3.7%). March Retail Sales were up 0.3% m/m (expected 0.4%; last 0.8%) and Q1 Retail Sales were unchanged qtr/qtr (last 0.8%).
  • Eurozone's April Manufacturing PMI hit 49.0 (expected 48.0; last 48.3). April flash CPI was up 0.6% m/m (last 0.6%), rising 2.2% yr/yr (expected 2.1%; last 2.2%). April Core CPI was up 1.0% m/m (last 1.0%), rising 2.7% yr/yr (expected 2.5%; last 2.4%). March Unemployment Rate remained at 6.2% (expected 6.1%).
  • Germany's April Manufacturing PMI hit 48.4 (expected 48.0; last 48.3).
  • France's April Manufacturing PMI hit 48.7 (expected 48.2; last 48.5). March government budget deficit widened to EUR47.0 bln from EUR40.3 bln.
  • Italy's April Manufacturing PMI hit 49.3 (expected 47.1; last 46.6). March Unemployment Rate rose to 6.0% from 5.9%, as expected.
  • Spain's April Manufacturing PMI hit 48.1 (expected 50.0; last 49.5).
  • Swiss April Manufacturing PMI hit 45.8 (expected 48.7; last 48.9).
• Commodities:
  • WTI Crude: -1.0% to $58.69/bbl
  • Gold: +1.6% to $3273.00/ozt
  • Copper: +0.2% to $3.486/lb
• Currencies:
  • EUR/USD: +0.5% to 1.1340
  • GBP/USD: +0.1% to 1.3286
  • USD/CNH: -0.6% to 7.2335
  • USD/JPY: -0.5% to 144.55
• Data out Today:
  • 8:30 ET: April Nonfarm Payrolls (Briefing.com consensus 130,000; prior 228,000), Nonfarm Private Payrolls (Briefing.com consensus 125,000; prior 209,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.3%), Unemployment Rate (Briefing.com consensus 4.2%; prior 4.2%), and Average Workweek (Briefing.com consensus 34.2; prior 34.2)
  • 10:00 ET: March Factory Orders (Briefing.com consensus 4.1%; prior 0.6%)