Bond Market Update

Steady Ahead of Jackson Hole Keynote

• U.S. Treasuries are on track for a flat start in longer tenors while the short end is expected to show some slight relative weakness out of the gate. Overnight action saw very little movement, reflecting anticipation ahead of today's start of the Jackson Hole Economic Symposium. Fed Chairman Powell will deliver the keynote address at 10:00 ET and his remarks will be parsed for signs of readiness for a September rate cut. The speech could also focus on other elements of policy with The Wall Street Journal reporting that the Fed may adopt a recommendation to replace flexible average inflation targeting with average inflation targeting that includes some employment objectives. The market will not receive any economic data today, leaving the focus on Mr. Powell's speech. Crude oil is hanging onto its gains from the past two days while the U.S. Dollar Index is up 0.1% at 98.70.
• Yield Check:
  • 2-yr: +1 bp to 3.80%
  • 3-yr: +1 bp to 3.75%
  • 5-yr: UNCH at 3.86%
  • 10-yr: UNCH at 4.33%
  • 30-yr: UNCH at 4.92%

• News:
  • Japan's Ministry of Finance is expected to raise its long-term rate forecast to 2.6% from 2.1%.
  • South Korea's Finance Ministry lowered its domestic growth forecast for 2025 to 0.9% from 1.8%. Growth in 2026 is expected to reach 1.8%.
  • Chinese chipmakers had a strong showing amid reports that NVIDIA is halting sales of the H20 chip to customers in China until a new product aimed for the Chinese market is ready.
  • Bank of Japan Governor Ueda, European Central Bank President Lagarde, and Bank of England Governor Bailey will take part in a panel discussion at the Jackson Hole Symposium tomorrow.
  • DHL will temporarily suspend business shipments to the U.S. as de minimis duties are set to make a return at the end of next week.
  • Germany's Economy Minister Reiche said that the weak GDP report for Q2 shows the urgent need for action.
  • China's July FDI was down 13.4% YTD (last -15.2%).
  • Japan's July National CPI was up 0.1% m/m (last 0.1%), rising 3.1% yr/yr (last 3.3%). July National Core CPI was up 3.1% yr/yr (expected 3.0%; last 3.3%).
  • Germany's final Q2 GDP contracted 0.3% qtr/qtr (expected -0.1%; last 0.3%) but was up 0.2% yr/yr (expected 0.4%; last 0.3%).
  • France's August Business Survey remained at 96, as expected.
• Commodities:
  • WTI Crude: +0.2% to $63.67/bbl
  • Gold: -0.3% to $3371.00/ozt
  • Copper: -0.1% to $4.438/lb
• Currencies:
  • EUR/USD: UNCH at 1.1605
  • GBP/USD: UNCH at 1.3414
  • USD/CNH: UNCH at 7.1835
  • USD/JPY: +0.2% to 148.70
• No Data on Today's Schedule