Bond Market Update

Pressure Persists

• U.S. Treasuries are on track for another lower start with the belly set to pace the early weakness after overnight pressure on sovereign debt. Treasury futures saw limited movement in early evening action, sliding to lows once the focus turned to the European session. The retreat in Treasury futures has coincided with additional upward pressure on the price of oil with WTI crude rising above $85/bbl. Qatar's oil minister said overnight that resuming normal energy deliveries would take weeks or months even if the war with Iran ended immediately. Meanwhile, President Trump is expected to provide additional details on a plan to counter the rally in crude later today. Before then, the market will receive the Employment Situation report for February (Briefing.com consensus 60,000; prior 130,000), alongside January Retail Sales (Briefing.com consensus -0.1%; prior 0.0%). Crude oil has reached its highest level since April 2024 while the U.S. Dollar Index is flat at 99.30.
• Yield Check:
  • 2-yr: +1 bp to 3.61%
  • 3-yr: +2 bps to 3.64%
  • 5-yr: +3 bps to 3.77%
  • 10-yr: +3 bps to 4.18%
  • 30-yr: +3 bps to 4.78%

• News:
  • The Wall Street Journal reported that Treasury Secretary Bessent will ask China to reduce its purchases of oil from U.S. adversaries ahead of President Trump's planned visit to China.
  • South Korea's vice finance minister said that a price ceiling for petroleum prices will be established.
  • European Central Bank policymaker De Guindos said that the central bank's policy stance could change if inflation expectations are affected by the war with Iran.
  • South Korea's February CPI was up 0.3% m/m (expected 0.4%; last 0.4%), rising 2.0% yr/yr (expected 2.1%; last 2.0%). January Current Account surplus reached $13.26 bln (last surplus of $18.70 bln).
  • Eurozone's Q4 GDP expanded 0.2% qtr/qtr (expected 0.3%; last 0.3%), growing 1.2% yr/yr, as expected (last 1.4%). Q4 Employment increased by 0.2% qtr/qtr, as expected (last 0.2%).
• Commodities:
  • WTI Crude: +6.6% to $86.40/bbl
  • Gold: +0.5% to $5103.90/ozt
  • Copper: +0.1% to $5.81/lb
• Currencies:
  • EUR/USD: -0.4% to 1.1560 
  • GBP/USD: -0.2% to 1.3338
  • USD/CNH: UNCH at 6.9155
  • USD/JPY: +0.3% to 157.93
• Data out Today: 
  • 8:30 ET: February Nonfarm Payrolls (Briefing.com consensus 60,000; prior 130,000), Nonfarm Private Payrolls (Briefing.com consensus 78,000; prior 172,000), Unemployment Rate (Briefing.com consensus 4.3%; prior 4.3%), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.4%), Average Workweek (Briefing.com consensus 34.3; prior 34.3), January Retail Sales (Briefing.com consensus -0.1%; prior 0.0%), and Retail Sales ex-auto (Briefing.com consensus 0.2%; prior 0.0%)
  • 10:00 ET: January Business Inventories (prior NA)
  • 15:00 ET: January Consumer Credit (Briefing.com consensus $9.9 bln; prior $24.0 bln)