Bond Market Update

Steady Start Ahead

• U.S. Treasuries are on track for a generally flat start after a quiet night in the futures market. Treasury futures have faced some light pressure to begin the holiday-abbreviated week while movement in other sovereign debt was limited. Treasury futures dipped out of the gate on Sunday evening, briefly slipping to fresh lows after the focus turned to action in Europe. Overnight action saw continued volatility in South Korea's largest tech stocks while other markets held up better. There was some renewed fighting in the Middle East, though markets remained confident that it would not derail the U.S.-Iran peace deal. Crude oil holds a modest gain but remains below $70/bbl at levels last seen at the start of March. The U.S. Dollar Index is down 0.1% at 101.27.
• Yield Check:
  • 2-yr: UNCH at 4.09%
  • 3-yr: +1 bp to 4.10%
  • 5-yr: UNCH at 4.13%
  • 10-yr: UNCH at 4.37%
  • 30-yr: UNCH at 4.86%

• News:
  • Standard & Poor's affirmed the U.S. AA+ rating with a Stable outlook.
  • Fed Chairman Warsh will speak at the European Central Bank's policy forum in Portugal on Wednesday.
  • China's May Industrial Profit was up 18.8% YTD (last 18.2%).
  • Japan's May Retail Sales rose 5.3% yr/yr (expected 3.1%; last 2.8%) and Large Retail Sales increased 5.3% yr/yr (expected 3.1%; last 2.8%).
  • India's May Industrial Production was up 5.1% yr/yr (expected 4.7%; last 4.9%) and May Manufacturing Production was up 5.5% m/m (last 6.2%).
  • Eurozone's May Private Sector Loans rose 3.1% yr/yr (expected 2.9%; last 3.0%) and loans to nonfinancials were up 4.0% yr/yr (last 3.4%). June Business and Consumer Survey rose to 95.0 from 93.7 (expected 94.3).
  • U.K.'s May Mortgage Approvals reached 56,210 (expected 63,000; last 66,030) and Mortgage Lending reached GBP2.89 bln (expected GBP4.60 bln; last GBP4.44 bln).
  • Spain's June CPI was up 0.6% m/m (last 0.1%), rising 3.2% yr/yr, as expected (last 3.2%). June Core CPI was up 2.9% yr/yr (last 2.9%).
• Commodities:
  • WTI Crude: +0.9% to $69.84/bbl
  • Gold: -1.1% to $4050.80/ozt
  • Copper: -0.4% to $6.121/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1409
  • GBP/USD: +0.3% to 1.3232
  • USD/CNH: -0.1% to 6.7963
  • USD/JPY: +0.1% to 161.82
• No Data on Today's Schedule