Bond Market Update

Weighed Down by Surging Oil

• U.S. Treasuries are on track for a lower start with shorter tenors set to pace an extension of last week's losses. Treasury futures slumped out of the gate on Sunday evening as energy prices continued their upward trend. Crude oil soared past $100/bbl, briefly approaching $120/bbl, exerting significant pressure on overall sentiment. Oil remains above $100/bbl this morning, but it has backed down from its overnight high after FT reported that G7 nations are discussing a potential joint reserve release. The extension of the rally in the price of oil was the biggest overnight story while the economic data flow was limited. China's February CPI was a bit hotter than expected, though it was only up 1.3% yr/yr (expected 0.9%). The U.S. session will not feature any data, keeping the market focused on oil and potential headline developments. The U.S. Dollar Index is up 0.3% at 99.29.
• Yield Check:
  • 2-yr: +4 bps to 3.60%
  • 3-yr: +4 bps to 3.62%
  • 5-yr: +4 bps to 3.76%
  • 10-yr: +4 bps to 4.17%
  • 30-yr: +2 bps to 4.78%

• News:
  • French President Macron said that G7 officials are likely to hold a joint call this week to address surging energy prices.
  • China's February CPI was up 1.0% m/m (last 0.2%), rising 1.3% yr/yr (expected 0.9%; last 0.2%). February PPI was down 0.9% yr/yr (expected -1.1%; last -1.4%).
  • Japan's January Overall Wage Income increased 3.0% yr/yr (expected 2.5%; last 2.4%). January Leading Index rose to 112.4 from 110.3 (expected 113.0) and January Coincident Indicator was up 2.5% m/m (last -0.5%).
  • Eurozone's March Sentix Investor Confidence fell to -3.1 from 4.2, as expected.
  • Germany's January Factory Orders were down -11.1% m/m (expected -4.2%; last 6.4%). January Industrial Production fell 0.5% m/m (expected 1.0%; last -1.0%), dropping 1.1% yr/yr (last 0.4%).
  • Swiss February SECO Consumer Climate remained at -30 (expected -29).
• Commodities:
  • WTI Crude: +13.0% to $102.70/bbl
  • Gold: -1.3% to $5094.00/ozt
  • Copper: -1.2% to $5.74/lb
• Currencies:
  • EUR/USD: -0.5% to 1.1562
  • GBP/USD: -0.5% to 1.3348
  • USD/CNH: +0.3% to 6.9243
  • USD/JPY: +0.4% to 158.43
• No Data on Today's Schedule