Bond Market Update

Inching Lower

• U.S. Treasuries are on track for a modestly lower start to the week after facing some light pressure in the overnight futures market. Treasury futures slumped out of the gate on Sunday evening, staying near their lows as the night went on. The market bounced briefly after the focus turned to action in Europe, followed by another slip toward lows. Overnight trade saw continued volatility in South Korea's Kospi (-4.5%), though U.S. equity futures point to a higher open. The weekend saw continued fighting between the U.S. and Iran, but this morning's news flow featured speculation about a ten-day ceasefire that would restore the peace agreement. Crude oil hovers near $80/bbl while the U.S. Dollar Index is little changed at 100.79.
• Yield Check:
  • 2-yr: +1 bp to 4.18%
  • 3-yr: UNCH at 4.20%
  • 5-yr: +1 bp to 4.28%
  • 10-yr: +1 bp to 4.55%
  • 30-yr: +1 bp to 5.07%

• News:
  • The Trump administration is reportedly considering banning the use of Chinese AI models in the U.S.
  • The Bureau of Economic Analysis will revise its methodology used to calculate core PCE inflation.
  • China Securities Regulatory Commission is reportedly aiming to stabilize the country's equity market at a time when many listed companies are announcing dividends and share buybacks.
  • The People's Bank of China left its one-year and five-year loan prime rates at their respective 3.00% and 3.50%.
  • The approval rating for Japan's Prime Minister Takaichi has fallen to a 2026 low of 53%.
  • New Zealand's June trade surplus reached NZD23 mln (expected surplus of NZD250 mln; last surplus of NZD577 mln).
  • Eurozone's May Construction Output was up 0.38% yr/yr (last 0.10%).
  • Germany's June PPI was down 0.3% m/m (expected -0.2%; last 0.3%) but up 1.8% yr/yr (last 0.1%).
  • U.K.'s June Rightmove House Price Index fell 1.0% m/m (last -0.6%), dropping 0.4% yr/yr (last -0.5%).
• Commodities:
  • WTI Crude: -2.6% to $80.32/bbl
  • Gold: +0.4% to $4034.90/ozt
  • Copper: +1.1% to $6.331/lb
• Currencies:
  • EUR/USD: UNCH at 1.1433
  • GBP/USD: +0.1% to 1.3465
  • USD/CNH: -0.1% to 6.7686
  • USD/JPY: UNCH at 162.34
• Data out Today:
  • 10:00 ET: June Leading Index (Briefing.com consensus 0.1%; prior 0.1%)