Bond Market Update

Following Form

• U.S. Treasuries are following form with recent action in that they saw weakness overnight that pushed yields higher. So far this week, however, the overnight weakness has been greeted with renewed buying interest in the cash session, courtesy of some market-friendly CPI and PPI data. Those reports are a thing of the past, but today brings a trove of releases that features June retail sales and weekly initial jobless claims. Market participants are in a wait-and-see mode ahead of those 8:30 a.m. ET releases, as they continue to digest visuals of rising bond yields around the globe and a fragile geopolitical situation that is contributing to ongoing oil supply concerns and inflation worries.
• Yield Check:
  • 2-yr: +3 bps to 4.16%
  • 3-yr: +2 bps to 4.20%
  • 5-yr: +2 bps to 4.28%
  • 10-yr: +2 bps to 4.57%
  • 30-yr: +3 bps to 5.11%

• News:
  • President Trump leaning towards expanding military operations in Iran that could include seizure of Iranian islands. WSJ
  • President Trump says Iran has allowed an American citizen, who was wrongfully detained in December of 2024, to leave the country, calling it a gesture of goodwill
  • USTR imposes 25% tariffs on certain imports from Brazil
  • Bank of Korea implemented first rate hike in 3 1/2 years (+25 bps to 2.75%, as expected)
  • South Korea's Financial Services Commission announces that it is meeting emergently to discuss market volatility and will soon have an announcement with respect to single, leveraged ETFs
  • China's AI Conference begins Friday with a keynote address from President Xi
  • UK's May GDP 0.1% m/m (0.0% expected; prior -0.1%) and 1.3% yr/yr (1.4% expected; prior 1.1%); May Industrial Production -0.5% m/m (-0.1% expected; prior 0.2%); May Construction Output -0.8% m/m (-0.3% expected; prior -0.1%)
• Commodities:
  • WTI crude: -0.3% to $79.38/bbl
  • Gold: -0.5% to $4030.60/ozt
  • Copper: +0.6% to $6.38/lb
• Currencies:
  • EUR/USD: flat at 1.1460
  • GBP/USD: -0.3% to 1.3499
  • USD/CNH: flat at 6.7691
  • USD/JPY: flat at 162.17
• The Day Ahead:
  • 08:30 ET: July Philadelphia Fed Index (Briefing.com consensus: 11.0; prior 10.3)
  • 08:30 ET: June Retail Sales (Briefing.com consensus: 0.3%; prior 0.9%) and Retail Sales, Ex-Auto (Briefing.com consensus: 0.1%; prior 0.8%)
  • 08:30 ET: Weekly Initial Claims (Briefing.com consensus: 219K; prior 215K) and Continuing Jobless Claims (prior 1814K)
  • 10:00 ET: May Business Inventories (Briefing.com consensus: 0.3%; prior 0.5%)
  • 10:00 ET: July NAHB Housing Market Index (Briefing.com consensus: 37; prior 35)
  • 10:00 ET: June Pending Home Sales (Briefing.com consensus: 0.4%; prior 3.8%)
  • 10:30 ET: EIA Natural Gas Inventories (prior +61 bcf)