Bond Market Update

Updated: 30-Sep-25 08:03 ET
Overnight Treasury Market Summary

Long End Behind After Monday Outperformance

  • U.S. Treasuries are on track for a slightly higher start in shorter tenors while longer tenors are set for a lower start after yesterday's outperformance. Treasury futures navigated a narrow range during the Asian session, followed by a short-lived spike to highs once the focus turned to action in Europe. The market received a typical end-of-month barrage of data, but the impact on debt and equity markets has been limited. China reported its private and official PMI readings with private readings pointing to slight growth while official readings essentially reflected a standstill in manufacturing and services. In Europe, Germany's August Retail Sales disappointed (-0.2% m/m; expected 0.6%) and while France's flash September CPI (-1.0% m/m; expected -0.9%) was cooler than expected. Germany's flash CPI report for September showed an acceleration in the yr/yr CPI rate to 2.4% from 2.2%. The U.S. session will feature a handful of economic reports, headlined by September Consumer Confidence (Briefing.com consensus 96.0; prior 97.4) at 10:00 ET. Crude oil is deepening yesterday's retreat while the U.S. Dollar Index is down 0.1% at 97.82.
  • Yield Check:
    • 2-yr: -2 bps to 3.61%
    • 3-yr: -2 bps to 3.61%
    • 5-yr: -2 bps to 3.72%
    • 10-yr: -1 bp to 4.13%
    • 30-yr: +1 bp to 4.71%
  • News:
    • One of Bank of Japan's most dovish policymakers spoke in favor of a rate hike, adding that a new policy perspective will be needed to address upside risks.
    • The Japanese government raised its view of consumer spending for the first time in 13 months.
    • The Bank of Japan will release its bond purchase plan for Q4 tomorrow.
    • The Reserve Bank of Australia left its cash rate at 3.60%, as expected.
    • Reports from France suggest that the country's flat tax may be raised as part of next year's budget.
    • Spain lowered its net issuance target for the year by EUR5 bln due to strong growth.
    • China's September Manufacturing PMI hit 49.8 (expected 49.6; last 49.4) and Non-Manufacturing PMI hit 50.0 (expected 50.3; last 50.3). RatingDog September Manufacturing PMI hit 51.2 (expected 50.3; last 50.5) and RatingDog Non-Manufacturing PMI hit 52.9 (expected 52.4; last 53.0).
    • Japan's August Industrial Production was down 1.2% m/m (expected -0.7%; last -1.2%). August Retail Sales were down 1.1% yr/yr (expected 1.0%; last 0.4%). August Housing Starts fell 9.8% yr/yr (expected -5.2%; last -9.7%) and Construction Orders jumped 38.9% yr/yr (last -19.0%).
    • South Korea's August Industrial Production rose 2.4% m/m (last 0.3%), increasing 0.9% yr/yr (expected 1.3%; last 5.0%). August Retail Sales were down 2.4% m/m (last 2.7%) and August Service Sector Output fell 0.7% m/m (last 0.2%).
    • Australia's August Building Approvals were down 6.0% m/m (expected 2.6%; last -10.0%), falling 1.2% yr/yr (expected 8.3%; last 9.2%). August Private Sector Credit rose 0.6% m/m, as expected (last 0.7%) and August Private House Approvals were down 2.6% m/m (last 1.3%).
    • New Zealand's September ANZ Business Confidence hit 49.6 (last 49.7).
    • Germany's flash September CPI was up 0.2%, as expected, rising 2.4% yr/yr (expected 2.3%; prior 2.2%). August Retail Sales were down 0.2% m/m (expected 0.6%; last -0.5%) but up 1.8% yr/yr (last 3.3%). August Import Price Index fell 0.5% m/m (expected -0.2%; last -0.4%), dropping 1.5% yr/yr (last -1.4%). September Unemployment increased by 14,000 (expected 8,000; last -9,000) and Unemployment Rate remained at 6.3%, as expected.
    • U.K.'s Q2 GDP expanded 0.3% qtr/qtr, as expected (last 0.7%), growing 1.4% yr/yr (expected 1.2%; last 1.3%). Q2 Business Investment fell 1.1% qtr/qtr (expected -4.0%; last 4.1%) but was up 3.0% yr/yr (expected 0.1%; last 5.8%). Q2 Current Account deficit reached GBP28.9 bln (expected deficit of GBP24.8 bln; last deficit of GBP21.2 bln).
    • France's August Consumer Spending rose 0.1% m/m (expected 0.3%; last -0.6%). Flash September CPI was down 1.0% m/m (expected -0.9%; last 0.4%) but up 1.2% yr/yr (expected 1.3%; last 0.9%). August PPI was down 0.2% m/m (last 0.5%) but up 0.1% yr/yr (last 0.5%).
    • Italy's flash September CPI was down 0.2% m/m (expected -0.1%; last 0.1%), rising 1.6% yr/yr (expected 1.7%; last 1.6%). August PPI was down 0.6% m/m (last 0.5%), rising 0.2% yr/yr (last 1.6%). July Industrial Sales rose 0.4% m/m (last 1.2%), increasing 1.2% yr/yr (last 0.3%).
    • Swiss September KOF Leading Indicators rose to 98.0 from 96.2 (expected 97.1).
  • Commodities:
    • WTI Crude: -0.9% to $62.91/bbl
    • Gold: -0.3% to $3842.00/ozt
    • Copper: -0.6% to $4.865/lb
  • Currencies:
    • EUR/USD: +0.1% to 1.1743
    • GBP/USD: +0.1% to 1.3436
    • USD/CNH: UNCH at 7.1272
    • USD/JPY: -0.4% to 147.97
  • Data out Today:
    • 9:00 ET: July FHFA Housing Price Index (prior -0.2%) and July S&P Case-Shiller Home Price Index (Briefing.com consensus 1.9%; prior 2.1%)
    • 9:45 ET: September Chicago PMI (prior 41.5)
    • 10:00 ET: September Consumer Confidence (Briefing.com consensus 96.0; prior 97.4) and July job openings (prior 7.181 mln)
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