Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a slightly higher start to the week after a subdued night in the futures market. Treasury futures inched higher during the early portion of the overnight session, but the advance was largely reversed after the attention turned to action in Europe. Investors received a sizable batch of final September PMI readings from major economies with France's Services PMI (51.2) rejoining others in expansionary territory while the S&P Global U.S. Services PMI (prior 58.7) will be released at 9:45 ET, followed by the ISM Non-Manufacturing Index (Briefing.com consensus 55.7; prior 55.4) at 10:00 ET. There has been some encouragement on the commodity side with crude oil slipping to $90/bbl after it was reported that Saudi Aramco lowered prices for Asian clients to a six-year low. However, prices for European buyers were increased. The U.S. Dollar Index is up 0.3% at 102.22.
• Yield Check:
  • 2-yr: UNCH at 4.82%
  • 3-yr: -1 bp to 4.95%
  • 5-yr: -1 bp to 5.05%
  • 10-yr: -1 bp to 5.27%
  • 30-yr: UNCH at 5.63%

• News:
  • Spain's Prime Minister Sanchez called a snap election for November 29.
  • Japan's September Household Confidence 35.4 (expected 35.3; prior 35.5); September S&P Global Services PMI 51.3 (expected 51.6; prior 52.5) and Composite PMI 52.3 (expected 52.5; prior 53.5)
  • Australia's September S&P Global Services PMI 51.9 (expected 51.4; prior 53.2) and Composite PMI 51.3 (expected 50.8; prior 52.7); September MI Inflation Gauge 0.3% m/m (prior 0.5%)
  • Eurozone's September HCOB Services PMI 53.0 (expected 53.0; prior 51.6) and Composite PMI 53.1 (expected 53.1; prior 52.0); August PPI 1.9% m/m (expected 1.9%; prior 1.6%) and 8.2% yr/yr (expected 8.1%; prior 5.8%); October Sentix Investor Confidence 2.7 (expected 4.5; prior 5.1)
  • Germany's September HCOB Services PMI 52.9 (expected 52.9; prior 49.7) and Composite PMI 53.8 (expected 53.8; prior 51.8)
  • France's September HCOB Services PMI 51.2 (expected 51.4; prior 48.0) and Composite PMI 51.1 (expected 51.2; prior 48.5)
  • Italy's September HCOB Services PMI 51.7 (expected 54.6; prior 55.2) and Composite PMI 51.0 (prior 53.6)
  • Spain's September HCOB Services PMI 58.3 (expected 57.1; prior 57.8)
  • U.K.'s September S&P Global Services PMI 52.1 (expected 51.7; prior 52.5) and Composite PMI 52.0 (expected 51.7; prior 52.5)
• Commodities:
  • WTI Crude: -1.2% to $90.04/bbl
  • Gold: +0.5% to $4183.00/ozt
  • Copper: +0.9% to $6.607/lb
• Currencies:
  • EUR/USD: -0.4% to 1.1205
  • GBP/USD: -0.1% to 1.3225
  • USD/CNH: +0.1% to 6.7069
  • USD/JPY: +0.3% to 158.22
• Data out Today:
  • 9:45 ET: Final September S&P Global U.S. Services PMI (prior 58.7)
  • 10:00 ET: September ISM Non-Manufacturing Index (Briefing.com consensus 55.7; prior 55.4)