Bond Market Update

Steady Start Ahead

• U.S. Treasuries are on track for a slightly higher start after a quiet night in the futures market. Treasury futures inched higher in early evening trade, reaching their best levels around the start of the European session, followed by a reversal. Other sovereign debt also had a solid night while global equity markets climbed. There was some speculation that officials from the U.S. and Iran could resume negotiations in the coming days. In other news, China reported a much smaller-than-expected trade surplus for March as import growth exceeded estimates by a wide margin while export growth missed expectations. Furthermore, exports in yuan terms decreased. The U.S. session will feature the release of March PPI (Briefing.com consensus 1.2%; prior 0.7%) and Core PPI (Briefing.com consensus 0.4%; prior 0.5%) at 8:30 ET. Crude oil is slipping toward $95/bbl while the U.S. Dollar Index is down 0.3% at 98.06.
• Yield Check:
  • 2-yr: -1 bp to 3.77%
  • 3-yr: -1 bp to 3.79%
  • 5-yr: -1 bp to 3.91%
  • 10-yr: -1 bp to 4.29%
  • 30-yr: UNCH at 4.90%

• News:
  • Treasury Secretary Bessent told Semafor that the Fed is right to hold its policy steady, adding that he would be shocked to see a rate hike from the European Central Bank.
  • The International Energy Agency released its Oil Market report for April, projecting a 1.5 million barrel per day supply drop and an 80,000-barrel demand decrease in 2026.
  • The market is no longer expecting the Bank of Japan to announce a rate hike on April 30 with the next hike being forecast for June.
  • The Bank of France expects domestic Q1 GDP growth of 0.3%, according to its monthly economic survey.
  • European Central Bank policymaker Rehn said that rate decisions are not locked in ahead of time and that the inflationary impact of the Iran war remains unclear.
  • China's March trade surplus reached $51.13 bln (expected $107.20 bln; last $213.62 bln) as imports grew 27.8% yr/yr (expected 11.1%; last 19.8%) and exports rose 2.5% yr/yr (expected 8.3%; last 21.8%).
  • Japan's February Industrial Production was down 2.0% m/m (expected -2.1%; last 4.3%) and Capacity Utilization dipped 0.1% m/m (last 2.9%).
  • Singapore's Q1 GDP contracted 1.3% qtr/qtr (expected -0.5%; last 1.3%) but expanded 4.6% yr/yr (expected 5.4%; last 5.7%).
  • Australia's March NAB Business Survey remained at 6 and NAB Business Confidence fell to -29 from 0. April Westpac Consumer Sentiment was down 12.5% (last 1.2%).
  • New Zealand's February Visitor Arrivals rose 1.7% m/m (last 1.1%).
  • Germany's March WPI was up 2.7% m/m (expected 0.4%; last 0.6%), rising 4.1% yr/yr (last 1.2%).
  • Spain's March CPI was up 1.2% m/m (expected 1.0%; last 0.4%), rising 3.4% yr/yr (expected 3.3%; last 2.3%). March Core CPI was up 2.9% yr/yr (expected 2.7%; last 2.7%).
• Commodities:
  • WTI Crude: -1.8% to $97.25/bbl
  • Gold: +0.7% to $4800.90/ozt
  • Copper: +0.7% to $6.032/lb
• Currencies:
  • EUR/USD: +0.3% to 1.1797
  • GBP/USD: +0.5% to 1.3569
  • USD/CNH: -0.1% to 6.8092
  • USD/JPY: -0.4% to 158.77
• Data out Today:
  • 6:00 ET: March NFIB Small Business Optimism (Briefing.com consensus 98.0; prior 98.8)
  • 8:30 ET: March PPI (Briefing.com consensus 1.2%; prior 0.7%) and Core PPI (Briefing.com consensus 0.4%; prior 0.5%)