Bond Market Update

Monday Slide Puts 2026 Lows in Sight

• U.S. Treasuries started the week with a steady Monday retreat that drove yields on longer tenors back to last week's highs with this year's highs from May looming not far above. The session started with slim losses that grew wider as the day went on despite a limited dose of global data and a small slate of news. There was some speculation about an effort to cobble another U.S.-Iran ceasefire after weekend fighting, but the report only caused some brief pressure on the price of oil before an eventual rise above $82/bbl. As for Treasuries, they ranged near their starting levels during the initial hour of action, followed by a steady downward drift into the afternoon that put yields on 10s and 30s within ten basis points of their respective 2026 highs from early May while the 2-yr yield finished just as far from its 2026 high, which was notched last week. The U.S. Dollar Index rose 0.2% to 100.95, building on last week's bounce off a one-month low.
• Yield Check:
  • 2-yr: +4 bps to 4.21%
  • 3-yr: +5 bps to 4.25%
  • 5-yr: +6 bps to 4.33%
  • 10-yr: +6 bps to 4.60%
  • 30-yr: +5 bps to 5.12%

• News:
  • The Trump administration is considering banning the use of Chinese AI models in the U.S., according to Axios.
  • Andy Burnham officially replaced Keir Starmer as British prime minister today.
  • 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%).
• Today's Data:
  • Conference Board's Leading Index was down 0.2% in June (Briefing.com consensus 0.1%) after increasing 0.1% in May.
• Commodities:
  • WTI crude: +1.1% to $82.59/bbl
  • Gold: -0.1% to $4016.10/ozt
  • Copper: +1.1% to $6.34/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1415
  • GBP/USD: -0.1% to 1.3434
  • USD/CNH: -0.1% to 6.7692
  • USD/JPY: +0.1% to 162.50
• No Data Tomorrow