Bond Market Update

Inching Higher

• U.S. Treasuries are on track for a slightly higher start after a quiet night. Treasury futures started the week with slim losses, but they spent the bulk of the night in a slow recovery from the lower start. The early pressure followed ongoing upward pressure on the price of oil, which rose past $107/bbl. before reversing. The overnight data flow was on the light side, showing China's weakest Retail Sales growth (0.2% yr/yr) since late 2022. In Europe, there has been ongoing speculation about the future of British Prime Minister Starmer. The U.S. Dollar Index is down 0.2% at 99.12, sitting just above its 50-day moving average (99.00).
• Yield Check:
  • 2-yr: -1 bp to 4.07%
  • 3-yr: -2 bps to 4.13%
  • 5-yr: -1 bp to 4.25%
  • 10-yr: -1 bp to 4.59%
  • 30-yr: -1 bp to 5.12%

• News:
  • Japan will implement an extra budget, contrary to recent reports.
  • The White House released a summary of agreements made between Presidents Trump and Xi, including an agreement for cooperation on rare earth elements.
  • A South Korean court ruled that actions taken by Samsung's union must not significantly hinder production.
  • Fitch affirmed Germany's AAA rating with a Stable outlook.
  • British Prime Minister Starmer is reportedly planning his exit, though he has not officially announced his resignation yet.
  • China's April Retail Sales were up 0.2% yr/yr (expected 2.0%; last 1.7%). April Industrial Production rose 4.1% yr/yr (expected 6.0%; last 5.7%), increasing 5.6% yr/yr (last 6.1%). April Fixed Asset Investment was down 1.6% yr/yr (expected 1.7%; last 1.7%), April Unemployment Rate fell to 5.2% from 5.4% (expected 5.3%), and April House Prices were down 3.5% yr/yr (last -3.4%).
  • Singapore's April trade surplus reached SGD13.068 bln (last surplus of SGD11.12 bln) as non-oil exports rose 11.0% m/m (last 3.0%), increasing 24.5% yr/yr (last 15.3%).
  • New Zealand's April Performance of Services Index hit 48.9 (last 46.2).
  • Italy's March trade surplus reached EUR4.709 bln (expected surplus of EUR5.25 bln; last surplus of EUR4.983 bln).
  • Swiss Q1 GDP expanded 0.5% qtr/qtr (last 0.1%).
• Commodities:
  • WTI Crude: -0.4% to $105.05/bbl
  • Gold: UNCH at $4559.90/ozt
  • Copper: -0.5% to $6.265/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1642
  • GBP/USD: +0.4% to 1.3376 
  • USD/CNH: -0.2% to 6.8009
  • USD/JPY: +0.1% to 158.84
• Data out Today:
  • 10:00 ET: May NAHB Housing Market Index (Briefing.com consensus 34; prior 34)
  • 16:00 ET: March Net Long-Term TIC Flows (prior $58.6 bln)