Bond Market Update

Steady Start Ahead

• U.S. Treasuries are on track for a quiet start with the short end expected to show some early relative strength while the long bond is set for a slightly lower open. Treasury futures dipped in early evening action, but they found support toward the end of the Asian session, spending early morning trade in a slow return toward yesterday's closing levels. The overnight newsflow did not contain any big surprises while precious metals have continued soaring. There were policy meetings in Hong Kong, Singapore, and Sweden, but all three central banks held their rates steady. The U.S. session will bring a few economic reports, including November Trade Balance (Briefing.com consensus -$43.5 bln; prior -$29.4 bln) and revised Q3 Productivity (Briefing.com consensus 4.9%; prior 4.9%) and Unit Labor Costs (Briefing.com consensus -1.9%; prior -1.9%) at 8:30 ET. Later in the day, the U.S. Treasury will complete this week's note auction slate with a $44 bln 7-yr note sale. Crude oil is rising to its best level since late September while the U.S. Dollar Index is down 0.1% at 96.36.
• Yield Check:
  • 2-yr: -1 bp to 3.57%
  • 3-yr: -1 bp to 3.64%
  • 5-yr: -1 bp to 3.83%
  • 10-yr: UNCH at 4.25%
  • 30-yr: +1 bp to 4.87%

• News:
  • South Korea's industry minister is visiting Washington amid the delay in implementing the trade deal with the U.S.
  • The Monetary Authority of Singapore concluded its latest meeting with no policy changes.
  • British Prime Minister Starmer visited Beijing today.
  • Sweden's Riksbank held its policy rate at 1.75%, as expected.
  • Japan's January Household Confidence rose to 37.9 from 37.2 (expected 37.1).
  • Singapore's Q4 Unemployment Rate remained at 2.0%.
  • Australia's Q4 Import Price Index was up 0.9% qtr/qtr (expected -0.2%; last -0.4%) and Export Price Index was up 3.2% qtr/qtr (last -0.9%).
  • New Zealand's December trade surplus reached NZD52 mln (expected surplus of NZD30 mln; last deficit of NZD355 mln). January ANZ Business Confidence fell to 64.1 from 73.6. January NBNZ Own Activity decreased to 51.6% from 60.9%.
  • Eurozone's January Business and Consumer Survey rose to 99.4 from 97.2 (expected 97.0). December Private Sector Loans were up 3.0% yr/yr (expected 2.9%; last 2.9%) and loans to nonfinancials were also up 3.0% yr/yr (last 3.1%).
  • France's December jobseeker total fell to 3.117 mln from 3.129 mln.
  • Italy's non-EU trade surplus reached EUR8.39 bln (last surplus of EUR7.04 bln). November Industrial Sales dipped 0.1% m/m (last -0.6%), showing no change yr/yr (last 1.7%).
  • Spain's December Retail Sales rose 2.9% yr/yr (last 6.0%). January Business Confidence ticked up to -3.0 from -3.4.
  • Swiss December trade surplus reached CHF1.036 bln (expected surplus of CHF4.85 bln; last surplus of CHF3.841 bln).
• Commodities:
  • WTI Crude: +2.5% to $64.81/bbl
  • Gold: +4.1% to $5521.10/ozt
  • Copper: +7.0% to $6.338/lb
• Currencies:
  • EUR/USD: UNCH at 1.1958
  • GBP/USD: UNCH at 1.3808
  • USD/CNH: UNCH at 6.9417
  • USD/JPY: -0.1% to 153.26
• Data out Today:
  • 8:30 ET: November Trade Balance (Briefing.com consensus -$43.5 bln; prior -$29.4 bln), weekly Initial Claims (Briefing.com consensus 205,000; prior 200,000), Continuing Claims (prior 1.849 mln), revised Q3 Productivity (Briefing.com consensus 4.9%; prior 4.9%) and revised Q3 Unit Labor Costs (Briefing.com consensus -1.9%; prior -1.9%)
  • 10:00 ET: November Factory Orders (Briefing.com consensus 0.5%; prior -1.3%) and November Wholesale Inventories (prior 0.5%)
  • 10:30 ET: Weekly natural gas inventories (prior -120 bcf)
• Treasury Auctions:
  • 13:00 ET: $44 bln 7-yr Treasury note auction results