Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a modestly higher start with the long bond set to reclaim its loss from yesterday while the short end lags. Treasury futures saw limited movement during the overnight session, starting with some early pressure that persisted until the early portion of the European session, when the market bounced to highs. Overnight action saw the release of weak sentiment surveys from Germany and slowing Core Retail Sales growth in the U.K., which invited some speculation about potential stagflation down the road. Economic data during the U.S. session will be limited to the 10:00 ET release of the final April reading of the University of Michigan's Consumer Sentiment survey (Briefing.com consensus 47.6; prior 47.6) and the market will remain on the lookout for Iran-related headlines ahead of a potential weekend meeting between negotiators. Crude oil is dipping back below $95/bbl while the U.S. Dollar Index is down 0.2% at 98.59.
• Yield Check:
  • 2-yr: -1 bp to 3.82%
  • 3-yr: UNCH at 3.84%
  • 5-yr: UNCH at 3.95%
  • 10-yr: -1 bp to 4.31%
  • 30-yr: -2 bps to 4.90%

• News:
  • Bangko Sentral ng Pilipinas raised its policy rate by 25 basis points to 4.50%, making for the first hike in two years.
  • Japan's Chief Cabinet secretary repeated that there is no need for a supplementary budget at this time.
  • China is expected to increase its grain harvest forecast for 2026 with stable prices.
  • Bank of England policymaker Breeden said that equity markets are too high and are set to fall.
  • China's March FDI was down 7.3% YTD (last -5.7%).
  • Japan's March National CPI was up 0.4% m/m, rising 1.5% yr/yr (last 1.3%). March National Core CPI was up 1.8% yr/yr (expected 1.7%; last 1.6%). March Corporate Services Price Index was up 3.1% yr/yr (expected 3.0%; last 2.7%).
  • Singapore's Q1 URA Property Index was up 0.9% qtr/qtr (expected 0.3%; last 0.6%).
  • Germany's April ifo Business Climate Index fell to 84.4 from 86.3 (expected 85.7). April Current Assessment fell to 85.4 from 86.7 (expected 86.2) and Business Expectations fell to 83.3 from 85.9 (expected 85.0).
  • U.K.'s March Retail Sales rose 0.7% m/m (expected 0.0%; last -0.6%), increasing 1.7% yr/yr (expected 1.3%; last 1.8%). March Core Retail Sales were up 0.2% m/m, as expected (last -0.6%), rising 1.7% yr/yr (expected 2.0%; last 2.7%).
  • France's April Consumer Confidence fell to 84 from 89 (expected 88).
  • Spain's March PPI was up 3.4% yr/yr (last -6.9%).
• Commodities:
  • WTI Crude: -1.3% to $94.61/bbl
  • Gold: -0.1% to $4720.40/ozt
  • Copper: -1.1% to $6.016/lb
• Currencies:
  • EUR/USD: +0.3% to 1.1715
  • GBP/USD: +0.2% to 1.3493
  • USD/CNH: UNCH at 6.8327
  • USD/JPY: -0.1% to 159.44
• Data out Today:
  • 10:00 ET: Final April University of Michigan Consumer Sentiment (Briefing.com consensus 47.6; prior 47.6)