Bond Market Update

Catalysts on the Horizon

• U.S. Treasuries are a tad stronger coming out of the overnight session, which featured some disappointing preliminary September manufacturing PMI readings for Germany, the UK, France, and the eurozone, all of which were in the sub-50 contraction zone. Services PMI readings for the eurozone and Germany, however, were above 50 and signaled an acceleration from the prior month. Preliminary manufacturing and services PMI readings for the U.S. will be published at 9:45 a.m. ET or slightly before President Trump is scheduled to address the UN. His speech will be closely watched, as will Fed Chair Powell's speech at 12:35 p.m. ET on the economic outlook and the $69 billion 2-yr note auction at 1:00 p.m. ET. In brief, the market is little changed now, but there are market-moving catalysts looming on the near horizon.
• Yield Check:
  • 2-yr: unch at 3.60%
  • 3-yr: -1 bp to 3.57%
  • 5-yr: -2 bps to 3.68%
  • 10-yr: -1 bp to 4.13%
  • 30-yr: -1 bp to 4.75%

• News:
  • President Trump will speak about the "failures of globalism" and "American strength" today at the United Nations, according to Fox News
  • President Trump will meet Democratic leadership this week ahead of the government funding deadline. Politico
  • September Manufacturing PMIs for Germany, France, the UK, and the eurozone were all in the sub-50 contraction zone, and activity was weaker than the prior month in all cases. Services PMI readings for the eurozone and Germany, however, were above 50 and signaled an acceleration from the prior month.
  • PBOC Governor Pan said policy is appropriately loose and that there are no systemic financial risks
  • OECD raises 2025 global growth forecast to 3.2% from 2.9%
  • Turkey plans to purchase hundreds of Boeing (BA) and Lockheed (LMT) fighter jets. Bloomberg
  • Sweden's Riksbank cut its policy rate by 25 basis points to 1.75%, saying the rate will likely remain there "for some time to come" if the outlook for inflation and economic activity holds
  • Several contenders for Japan's prime minister position spoke of the need to maintain fiscal discipline
  • Secret Service prevented plot to disrupt NYC cell phone service, according to ABC News
  • Eurozone's September HCOB Manufacturing PMI 49.5 (expected 50.7; prior 50.7) and HCOB Services PMI 51.4 (expected 50.6; prior 50.5)
• Commodities:
  • WTI crude: +1.2% to $63.00/bbl
  • Gold: +1.2% to $3821.70/ozt
  • Copper: -0.1% to $4.63/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1794
  • GBP/USD: flat at 1.3511
  • USD/CNH: flat at 7.1147
  • USD/JPY: flat at 147.76
• The Day Ahead:
  • 08:30 ET: Q2 Current Account Balance (Briefing.com consensus: -$302.1B; prior -$450.2B)
  • 09:00 ET: Fed Vice Chair Bowman (FOMC voter) speech on the economic outlook
  • 09:45 ET: September S&P Global U.S. Manufacturing PMI - Prelim (prior 53.0) and S&P Global U.S. Services PMI - Prelim (prior 54.5)
  • 09:50 ET: President Trump to address UN
  • 10:00 ET: Atlanta Fed President Bostic (non-FOMC voter)
  • 12:35 ET: Fed Chair Powell (FOMC voter) speech on the economic outlook
  • 13:00 ET: $69 billion 2-yr note auction