Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a modestly higher start, looking to build on gains from last week. Treasury futures climbed on Sunday evening, followed by a dip from highs that were reached near the end of the Asian session. The advance in Treasuries has taken place despite a mixed showing from other sovereign debt. French OATs faced pressure after a weekend intensification of social unrest and President Macron's call for calm. Equity sentiment has been mixed, as some Asian markets recorded gains while the European session has seen losses in all major markets. Economic data released overnight included above-consensus Q3 GDP from China (1.2%; expected 1.1%) while data during the U.S. session will be limited to the 10:00 ET release of the October NAHB Housing Market Index (Briefing.com consensus 31; prior 32). Crude oil holds a slim loss while the U.S. Dollar Index is flat at 101.82.
• Yield Check:
  • 2-yr: -2 bps to 4.72%
  • 3-yr: -2 bps to 4.81%
  • 5-yr: -1 bp to 4.88%
  • 10-yr: -2 bps to 5.08%
  • 30-yr: -1 bp to 5.43%

• News:
  • Russia's President Putin proposed a summit with President Trump and China's President Xi to find a way to end the war in Ukraine.
  • Bank of Japan Governor said that Japan's underlying inflation is quite close to the 2.0% target.
  • Reserve Bank of Australia Governor Kent said that there is evidence that neutral rates are increasing in Australia and abroad.
  • China's Q3 GDP 1.2% qtr/qtr (expected 1.1%; prior 0.9%) and 4.5% yr/yr (expected 4.4%; prior 4.3%). September Industrial Production 5.5% yr/yr (expected 5.4%; prior 5.2%); Retail Sales 1.1% yr/yr (expected 0.5%; prior 0.4%); Fixed Asset Investment -7.2% yr/yr (expected -7.3%; prior -7.2%); Unemployment Rate 5.2% (expected 5.3%; prior 5.3%). September House Prices -2.8% yr/yr (prior -3.0%).
  • Japan's August Tertiary Industry Activity Index -4.10 (prior 0.70).
  • New Zealand's September Performance of Services Index 50.9 (prior 51.0); Trade Balance -NZD1.971 bln (expected -NZD775 mln; prior -NZD1.536 bln), with exports of NZD6.47 bln (prior NZD6.48 bln) and imports of NZD8.44 bln (prior NZD8.02 bln).
  • U.K.'s October Rightmove House Price Index +1.0% m/m (prior +0.7%) and -0.1% yr/yr (prior -0.8%)
• Commodities:
  • WTI Crude: -0.3% to $101.14/bbl
  • Gold: +0.2% to $4190.00/ozt
  • Copper: UNCH at $6.576/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1227
  • GBP/USD: +0.1% to 1.3336
  • USD/CNH: -0.1% to 6.6797
  • USD/JPY: +0.1% to 158.16
• Data out Today:
  • 10:00 ET: October NAHB Housing Market Index (Briefing.com consensus 31; prior 32)