Bond Market Update

 Sliding Again

• U.S. Treasuries are on track for a lower start that will erase yesterday's gains in all tenors. Treasury futures began slipping in early evening trade, continuing their retreat through the rest of the night. Geopolitical concerns were back at the forefront after Iranian officials refuted reports of negotiations with the U.S. Oil prices have headed higher with WTI crude approaching $95/bbl while Brent is back above $100/bbl. This week has been light in terms of economic data, and things will remain that way today with the weekly Jobless Claims report as this morning's lone release. Later in the day, the U.S. Treasury will cap this week's note auction slate with a sale of $44 bln in 7-yr notes. The U.S. Dollar Index is up 0.1% at 99.72.
• Yield Check:
  • 2-yr: +5 bps to 3.93%
  • 3-yr: +5 bps to 3.93%
  • 5-yr: +7 bps to 4.04%
  • 10-yr: +5 bps to 4.38%
  • 30-yr: +4 bps to 4.94%

• News:
  • Japan will announce a provisional budget for fiscal 2026 tomorrow with the amount expected to reach JPY8.6 trln.
  • South Korea will stabilize its bond market with excess tax revenue.
  • European Central Bank policymaker Nagel said that a rate hike in April is an option.
  • French Economy Minister Lescure hinted at incoming measures to offset high oil prices.
  • Japan's February Corporate Services Price Index was up 2.7% yr/yr (expected 2.6%; last 2.6%) and January BoJ Core CPI was up 2.2% yr/yr (expected1.6%; last 2.3%).
  • Hong Kong's February trade deficit reached HKD64.2 bln (last deficit of HKD14.1 bln) as imports jumped 29.9% m/m (last 38.1%) and exports rose 24.7% m/m (last 33.8%).
  • Singapore's February Industrial Production was down 7.2% m/m (last 2.0%), slipping 0.1% yr/yr (last 12.9%).
  • Eurozone's February M3 Money Supply grew 3.0% yr/yr (expected 3.3%; last 3.3%), February Private Sector Loans increased 3.0% yr/yr (expected 3.1%; last 3.0%), and February Loans to nonfinancials rose 2.9% yr/yr (last 2.8%).
  • Germany's April GfK Consumer Climate fell to -28.0 from -24.8 (expected -27.3).
  • France's March Business Survey fell to 99 from 102 (expected 100) and Consumer Confidence fell to 89 from 91, as expected.
  • Italy's March Consumer Confidence fell to 92.6 from 97.4 and Business Confidence rose to 88.8 from 88.5.
  • Spain's Q4 GDP expanded 0.8% qtr/qtr, as expected (last 0.6%), growing 2.7% yr/yr (expected 2.6%; last 2.7%).
• Commodities:
  • WTI Crude: +4.3% to $94.15/bbl
  • Gold: -2.5% to $4438.80/ozt
  • Copper: -0.7% to $5.524/lb
• Currencies:
  • EUR/USD: -0.3% to 1.1528
  • GBP/USD: -0.2% to 1.3333
  • USD/CNH: +0.2% to 6.9183
  • USD/JPY: +0.2% to 159.62
• Data out Today:
  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 210,000; prior 205,000) and Continuing Claims (prior 1.857 mln)
  • 10:30 ET: Weekly natural gas inventories (prior +35 bcf)
• Treasury Auctions:
  • 13:00 ET: $44 bln 7-yr Treasury note auction results