Bond Market Update

 Steady Start Ahead

• U.S. Treasuries are on track for a flat start after a quiet night in the futures market. Treasury futures spent the overnight session in a narrow sideways range while other sovereign debt faced some light general pressure. There was some improvement in equity sentiment, as South Korea's Kospi (+3.6%) climbed off its lowest level since late April. Meanwhile, the news flow was on the quiet side for another night. The market received a handful of economic reports, including some improvement in European sentiment surveys and British employment, while the U.S. session will be free of noteworthy data. Crude oil hovers near $84/bbl while the U.S. Dollar Index is flat at 100.95.
• Yield Check:
  • 2-yr: UNCH at 4.21%
  • 3-yr: UNCH at 4.25%
  • 5-yr: UNCH at 4.33%
  • 10-yr: UNCH at 4.60%
  • 30-yr: UNCH at 5.12%

• News:
  • Japan's cabinet approved the new general economic framework, which prioritizes fiscal sustainability.
  • China's National Development and Reform Commission called for stronger development of the private economy and the services sector.
  • The latest bank lending survey from the European Central Bank showed tighter access to credit in Q2 due to geopolitical instability with additional tightening expected in Q3.
  • Hong Kong's June CPI was unchanged m/m (last 0.0%), rising 2.0% yr/yr (last 2.0%).
  • New Zealand's Q2 CPI was up 1.5% qtr/qtr (expected 1.4%; last 0.9%), rising 4.1% yr/yr (expected 4.0%: last 3.1%).
  • Eurozone's July ZEW Economic Sentiment rose to 23.4 from 9.5 (expected 11.2).
  • Germany's July ZEW Economic Sentiment rose to 26.3 from 10.5 (expected 15.1) and ZEW Current Conditions rose to -77.6 from -81.0 (expected -77.8).
  • U.K.'s May three-month employment increased by 147,000 (expected 85,000; last 100,000), May Claimant Count increased by 6,700 (expected 29,400; last 1,300). May Average Earnings Index + Bonus was up 4.3% yr/yr (expected 4.5%; last 4.4%). May Unemployment Rate remained at 4.9%, as expected.
  • Spain's May trade deficit reached EUR8.24 bln (last deficit of EUR5.20 bln).
  • Swiss June trade surplus reached CHF5.224 bln (last surplus of CHF5.989 bln).
• Commodities:
  • WTI Crude: +1.7% to $84.60/bbl
  • Gold: +1.1% to $4060.20/ozt
  • Copper: +2.9% to $6.527/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1418
  • GBP/USD: -0.1% to 1.3404 
  • USD/CNH: UNCH at 6.7661
  • USD/JPY: +0.2% to 162.75
• No Data on Today's Schedule