Bond Market Update

Pushing Higher

• U.S. Treasuries are on track for a higher start, looking to continue their modest rebound from Friday. Treasury futures climbed at the start of the overnight session with the market spending the rest of the night in a sideways range just below highs. Longer tenors have been at the forefront of the overnight advance after underperforming on Friday. Like Treasuries, other sovereign debt has started the week on a solid note while global equities have also had a good showing with technology stocks seeing some strength in Asia. Today's session will feature the 8:30 ET release of the Durable Orders report for June (Briefing.com consensus 0.9%; prior 1.3%) and the U.S. Treasury will conduct note sales at 11:30 ET and 13:00 ET. Crude oil has plunged toward $80/bbl after a relatively quiet weekend on the U.S.-Iran front while the U.S. Dollar Index is down 0.2% at 101.31.
• Yield Check:
  • 2-yr: -2 bps to 4.31%
  • 3-yr: -3 bps to 4.33%
  • 5-yr: -4 bps to 4.39%
  • 10-yr: -4 bps to 4.64%
  • 30-yr: -4 bps to 5.12%

• News:
  • The approval rating of Japan's Prime Minister Takaichi has fallen below 60% for the first time since she took office amid some concerns about long-term debt levels and doubts that the big-boned economic plan will deliver promised results.
  • The Bank of Japan is not expected to announce a rate hike later this week, but it is likely to affirm its commitment to more hikes in the coming months.
  • The Monetary Authority of Singapore tightened its policy unexpectedly.
  • European Central Bank policymaker Kazimir said that a September rate hike is needed even if the outlook improves.
  • The Bank of England is expected to hold its bank rate steady on Thursday, but some hawkishness is the central bank's commentary is expected.
  • China's June Industrial Profit was up 18.7% YTD (last 18.8%).
  • Japan's June Corporate Services Price Index was up 3.2% yr/yr (last 3.4%). May Leading Index rose to 116.5 from 116.1 (expected 116.8).
  • Singapore's June Industrial Production was down 7.2% m/m (last 6.9%) but up 7.2% yr/yr (last 17.8%).
  • Hong Kong's June trade deficit reached HKD52.0 bln (last deficit of HKD44.2 bln) as imports grew 45.4% m/m (last 42.0%) and exports jumped 53.4% m/m (last 40.8%).
  • Eurozone's June Private Sector Loans were up 3.0% yr/yr (expected 3.1%; last 3.0%) and loans to nonfinancials were up 4.0% yr/yr (last 4.0%).
  • Germany's July ifo Business Climate Index rose to 86.6 from 85.7 (expected 86.1). July Business Expectations rose to 86.7 from 84.3 and Current Assessment fell to 86.5 from 87.0.
  • U.K.'s July CBI Distributive Trades Survey rose to -26 from -54 (expected -45).
• Commodities:
  • WTI Crude: -6.9% to $83.16/bbl
  • Gold: +0.7% to $4098.10/ozt
  • Copper: +0.7% to 6.40/lb
• Currencies:
  • EUR/USD: +0.2% to 1.1388
  • GBP/USD: -0.1% to 1.3313
  • USD/CNH: -0.1% to 6.7672
  • USD/JPY: -0.1% to 163.64
• Data out Today:
  • 8:30 ET: June Durable Orders (Briefing.com consensus 2.0%; prior -4.5%) and Durable Orders -ex transportation (Briefing.com consensus 0.9%; prior 1.3%)
• Treasury Auctions:
  • 11:30 ET: $69 bln 2-yr Treasury note auction results 
  • 13:00 ET: $70 bln 5-yr Treasury note auction results