Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a modestly higher start after three days of losses across the curve. Treasury futures navigated a sideways range through the bulk of the night, rising to highs in recent trade. Yesterday's visit of European leaders to the White House is expected to be followed with a trilateral meeting between leaders from the U.S., Russia, and Ukraine, though a specific time has not been set yet. The overnight economic data flow was on the light side, leaving the focus on the aftermath of the meeting at the White House. The market will receive some new housing data this morning in form of the 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) report at 8:30 ET. Crude oil is under pressure while the U.S. Dollar Index is down 0.1% at 98.03.
• Yield Check:
  • 2-yr: -1 bp to 3.76%
  • 3-yr: -2 bps to 3.72%
  • 5-yr: -2 bps to 3.84%
  • 10-yr: -1 bp to 4.33%
  • 30-yr: -2 bps to 4.92%

• News:
  • Standard & Poor's affirmed the U.S. AA+ rating with a Stable outlook.
  • The British government may implement a tax on home sales over GBP500,000 as it continues seeking new revenue.
  • The Reserve Bank of New Zealand is expected to announce a 25-basis point cut to 3.00% when it meets tonight.
  • South China Morning Post reported that Chinese state-owned computing companies have been told to source more than half of their chips from domestic suppliers.
  • Hong Kong's July Unemployment Rate rose to 3.7% from 3.5%.
  • Australia's August Westpac Consumer Sentiment was up 5.7% (last 0.6%).
  • New Zealand's Q2 Input PPI was up 0.6% qtr/qtr (expected 1.4%; last 2.9%) and Output PPI was up 0.6% qtr/qtr (expected 1.0%; last 2.1%).
  • Eurozone's June Current Account surplus reached EUR35.8 bln (expected surplus of EUR33.4 bln; last surplus of EUR32.3 bln).
• Commodities:
  • WTI Crude: -1.0% to $62.81/bbl
  • Gold: +0.2% to $3385.90/ozt
  • Copper: -0.2% to $4.462/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1686
  • GBP/USD: +0.1% to 1.3521
  • USD/CNH: UNCH at 7.1830
  • USD/JPY: -0.1% to 147.69
• Data out Today:
  • 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)