Bond Market Update

Quiet Start to New Week

• U.S. Treasuries started the week on a slightly lower, but generally quiet, note. The market saw limited movement on Monday, as there were no significant surprises on the economic and global news fronts. President Trump's Friday meeting with Russia's President Putin did not produce any immediate agreements, but it led to more talks in Washington, this time with European leaders, including the Ukrainian president. The hope is now that a trilateral meeting between leaders from the U.S., Ukraine, and Russia will take place soon. Treasuries opened the day with modest gains but immediately slipped from their starting highs. The backtracking continued into the late morning with the 10-yr yield touching its 50-day moving average (4.351%), followed by a shallow bounce off lows into the close. Crude oil stayed below $63/bbl while the U.S. Dollar Index rose 0.3% to 98.17.
• Yield Check:
  • 2-yr: +1 bp to 3.77%
  • 3-yr: +2 bps to 3.74%
  • 5-yr: +1 bp to 3.86%
  • 10-yr: +1 bp to 4.34%
  • 30-yr: +2 bps to 4.94%

• News:
  • Japan's Financial Services Agency is expected to approve yen-denominated stablecoins this month.
  • There was speculation about a potential corporate tax hike in Japan.
  • South Korea may reduce its workweek to 4.5 days.
  • Japan's June Tertiary Industry Activity Index rose to 4.50 from -1.40.
  • Singapore's July non-oil exports were down 6.0% m/m (last 14.2%), falling 4.6% yr/yr (last 12.9%).
  • New Zealand's July Performance of Services Index hit 48.9 (last 47.6).
  • Eurozone's June trade surplus reached EUR7.0 bln (expected surplus of EUR18.1 bln; last surplus of EUR16.5 bln).
  • U.K.'s August Rightmove House Price Index was down 1.3% m/m (last -1.2%) but up 0.3% yr/yr (last 0.1%).
  • Spain's June trade deficit reached EUR3.59 bln (last deficit of EUR2.54 bln).
  • Swiss Q2 Industrial Production was down 0.1% yr/yr (last 8.9%).
• Today's Data:
  • The NAHB Housing Market Index fell to 32 in August (Briefing.com consensus 34) from 33 in July.
• Commodities:
  • WTI crude: UNCH at $62.75/bbl
  • Gold: -0.1% to $3378.20/ozt
  • Copper: -0.5% to $4.47/lb
• Currencies:
  • EUR/USD: -0.4% to 1.1662
  • GBP/USD: -0.3% to 1.3507
  • USD/CNH: +0.1% to 7.1877
  • USD/JPY: +0.5% to 147.85
• The Day Ahead: 
  • 8:30 ET: July Housing Starts (Briefing.com consensus 1.311 mln; prior 1.321 mln) and Building Permits (Briefing.com consensus 1.390 mln; prior 1.393 mln)