Bond Market Update

 Short End Behind

• U.S. Treasuries are on track for a lower start with shorter tenors expected to show slight relative weakness at the start. Treasury futures faced some pressure on Friday while the cash market was closed, followed by sideways action with a slight upward bias since yesterday's futures open. Meanwhile, other sovereign debt is mostly higher today. Investors have maintained some focus on the fragile U.S.-Iran peace deal. The two sides approved a plan for the final round of negotiations regarding Iran's nuclear program, but there were also some concerns about Iran's announcement that it will again block the Strait of Hormuz due to continued fighting in Lebanon. However, U.S. officials were quick to push back against the claims. Crude oil, meanwhile, holds a slim loss near $77/bbl while the U.S. Dollar Index is flat at 100.89. Today's session will not see the release of any data.
• Yield Check:
  • 2-yr: +4 bps to 4.22%
  • 3-yr: +4 bps to 4.23%
  • 5-yr: +4 bps to 4.27%
  • 10-yr: +4 bps to 4.49%
  • 30-yr: +3 bps to 4.93%

• News:
  • The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.50% and 5.00%.
  • China's second-largest shopping festival of the year, which took place on Friday, saw soft demand.
  • Japan plans to invest JPY10.5 trln in AI-related projects by 2040, according to Nikkei.
  • The market is growing more confident that the Bank of Japan's next rate hike will take place no later than October.
  • Greater Manchester Mayor Burnham is expected to run to become the leader of the U.K.'s Labour party, which would make him prime minister.
  • China's May FDI was down 8.6% YTD (last -10.3%).
  • New Zealand's May Credit Card Spending was up 5.1% yr/yr (last 3.1%).
  • India's May Infrastructure Output was up 0.5% yr/yr (last 1.7%).
  • Switzerland's May M3 Money Supply reached CHF1.23 trln (last CHF1.23 trln).
• Commodities:
  • WTI Crude: -0.1% to $76.50/bbl
  • Gold: -0.6% to $4222.40/ozt
  • Copper: -0.3% to $6.368/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1448
  • GBP/USD: UNCH at 1.3236
  • USD/CNH: UNCH at 6.7787
  • USD/JPY: +0.3% to 161.76
• No Data on Today's Schedule