Bond Market Update

Keeping Calm

• U.S. Treasuries had a fairly calm overnight session, gearing up for the release of the August Retail Sales report at 8:30 a.m. ET, the $13 billion 20-yr bond reopening results at 1:00 p.m. ET, and, of course, Wednesday's FOMC rate decision and release of the Summary of Economic Projections. Stephen Miran will be part of that decision after the Senate confirmed his nomination to complete the term vacated by former Fed Governor Kugler. In related news, Fed Governor Cook will also be part of that decision following an Appeals Court ruling that the president cannot fire her ahead of that meeting. Yields are little changed across the curve, and the dollar is weaker, with the euro doing some flexing.
• Yield Check:
  • 2-yr: unch at 3.53%
  • 3-yr: unch at 3.50%
  • 5-yr: unch at 3.60%
  • 10-yr: +1 bp to 4.04%
  • 30-yr: +1 bp to 4.67%

• News:
  • The Senate confirmed Stephen Miran to Fed Board and he will attend this week's meeting. Appeals Court rejected plan to remove Lisa Cook from Fed Board. WSJ
  • Treasury Secretary Bessent is confident the Supreme Court will uphold President Trump's tariff authority.
  • Treasury Secretary Bessent tells CNBC the plan right now is for Stephen Miran to come back to CEA after the initial term, and then another person will be appointed to the Fed Board; says he had a great interview session with James Bullard
  • President Trump begins his UK state visit this evening.
  • ECB member Kazaks said there is no reason to cut rates further right now, a view that is helping to underpin the euro.
  • The BOE is expected to leave its key policy rate unchanged at 4.00% at Thursday's meeting.
  • Today marked the implementation of the reduced 15% tariff rate (from 27.5%) on imports of Japanese vehicles and auto parts to the U.S.
  • The Bank of Japan meets Friday and is expected to hold its key policy rate at 0.50%.
  • Eurozone's September ZEW Economic Sentiment 26.1 (expected 20.3; last 25.1)
• Commodities:
  • WTI crude: +0.6% to $63.69/bbl
  • Gold: +0.3% to $3729.90/ozt
  • Copper: -0.3% to $4.70/lb
• Currencies:
  • EUR/USD: +0.4% to 1.1806
  • GBP/USD: +0.2% to 1.3635
  • USD/CNH: -0.1% to 7.1123
  • USD/JPY: -0.2% to 147.04
• The Day Ahead:
  • 08:30 ET: August Retail Sales (Briefing.com consensus 0.3%; prior 0.5%), Retail Sales ex-auto (Briefing.com consensus 0.3%; prior 0.3%)
  • 08:30 ET: August Import Prices (prior 0.4%), Import Prices ex-oil (prior 0.3%), Export Prices (prior 0.1%), and Export Prices ex-agriculture (prior 0.1%
  • 09:15 ET: August Industrial Production (Briefing.com consensus 0.0%; prior -0.1%) and Capacity Utilization (Briefing.com consensus 77.4%; prior 77.5%)
  • 10:00 ET: July Business Inventories (Briefing.com consensus 0.2%; prior 0.0%)
  • 10:00 ET: September NAHB Housing Market Index (Briefing.com consensus 33; prior 32)
• Treasury Auctions:
  • 13:00 ET: $13 bln 20-yr Treasury bond reopening results