Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a modestly higher start after a couple days of losses in all tenors. Treasury futures inched lower in early evening action, spending the remainder of the night in a slow recovery that lifted the complex to highs during the past couple hours. Overnight action saw some profit taking in global equity markets while sovereign debt has largely held steady. The market received only a handful of economic reports since yesterday's close, headlined by eurozone's trade balance report for February, which was essentially in line with expectations. The U.S. session, however, will be free of economic data. The market will enter another weekend with the spotlight on U.S.-Iran negotiations. President Trump said that talks could resume this weekend, adding that he is not sure about extending the ceasefire agreement. Crude oil is slipping toward $91/bbl while the U.S. Dollar Index is down 0.1% at 98.10.
• Yield Check:
  • 2-yr: -1 bp to 3.77%
  • 3-yr: -2 bps to 3.78%
  • 5-yr: -1 bp to 3.90%
  • 10-yr: -1 bp to 4.30%
  • 30-yr: -1 bp to 4.92%

• News:
  • Fitch noted that China's credit outlook remains bogged down by weak domestic demand.
  • The People's Bank of China increased the cap on bank lending to offshore entities.
  • European Central Bank policymaker Muller said that it should not be assumed that the energy shock will be temporary, adding that he is not ruling out a rate hike this month.
  • Singapore's March trade surplus reached SGD11.22 bln (last surplus of SGD4.57 bln) as non-oil exports rose 3.0% m/m (last 3.9%); 15.3% yr/yr (last 4.0%).
  • New Zealand's March Electronic Card Retail Sales rose 0.7% m/m (last 1.4%), increasing 2.7% yr/yr (last 1.5%). March FPI was down 0.6% m/m (last -0.1%).
  • Eurozone's February trade surplus reached EUR11.5 bln (expected surplus of EUR11.7 bln; last deficit of EUR1.0 bln). February Current Account surplus reached EUR24.9 bln (expected surplus of EUR29.8 bln; last surplus of EUR40.4 bln).
  • Italy's February trade surplus reached EUR4.944 bln (expected surplus of EUR3.83 bln; last surplus of EUR1.13 bln).
• Commodities:
  • WTI Crude: -3.7% to $91.18/bbl
  • Gold: +0.2% to $4816.80/ozt
  • Copper: -0.6% to $6.043/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1796
  • GBP/USD: +0.1% to 1.3533
  • USD/CNH: +0.1% to 6.8235
  • USD/JPY: +0.1% to 159.19
• No Data on Today's Schedule