Bond Market Update

Little Changed Despite Geopolitical Mess

• U.S. Treasuries are on track for a slightly lower start after two days of gains in all tenors and three days of gains in longer tenors. Treasury futures climbed last evening when Israel launched an attack on Iran, but the modest evening gains faded as the night went on with futures sliding to lows during the past hour. The Treasury market's response has been limited so far while crude oil futures have jumped to levels last seen in late January. The U.S. Dollar Index is up 0.6% at 98.54, rising off its lowest level since early 2022. Today's economic data will be limited to the 10:00 ET release of the preliminary reading of the University of Michigan's Consumer Sentiment Index for June (Briefing.com consensus 53.0; prior 52.2).
• Yield Check:
  • 2-yr: UNCH at 3.91%
  • 3-yr: +1 bp to 3.87%
  • 5-yr: +1 bp to 3.97%
  • 10-yr: UNCH at 4.36%
  • 30-yr: +1 bp to 4.85%

• News:
  • Japan is likely to hold an upper house election on July 20.
  • China's May New Loans reached CNY620.0B (expected CNY890.0B; last CNY280.0B).
  • Japan's April Industrial Production was down 1.1% m/m (expected -1.2%; last 0.2%).
  • New Zealand's May Business NZ PMI hit 47.5 (last 53.3).
  • Eurozone's April Industrial Production was down 2.4% m/m (expected -1.6%; last 2.4%) but up 0.8% yr/yr (expected 1.4%; last 3.7%); April Trade surplus reached EUR9.9B (expected EUR18.2B; last EUR37.3B).
  • Germany's May CPI was up 0.1% m/m (expected 0.1%; last 0.4%), rising 2.1% yr/yr (expected 2.1%; last 2.1%).
  • France's May CPI was down 0.1% m/m (expected -0.1%; last 0.6%) but was up 0.7% yr/yr (expected 0.7%; last 0.8%).
  • Spain's May CPI was up 0.1% m/m (expected 0.0%; last 0.6%), rising 2.0% yr/yr (expected 1.9%; last 2.2%).
• Commodities:
  • WTI Crude: +7.2% to $72.95/bbl
  • Gold: +1.2% to $3443.00/ozt
  • Copper: -2.0% to $4.739/lb
• Currencies:
  • EUR/USD: -0.7% to 1.1507
  • GBP/USD: -0.6% to 1.3537
  • USD/CNH: +0.2% to 7.1849
  • USD/JPY: +0.5% to 144.18
• Data out Today:
  • 10:00 ET: Preliminary June University of Michigan Consumer Sentiment (Briefing.com consensus 53.0; prior 52.2)