Bond Market Update

Extending Recent Losses

• U.S. Treasuries are on track for a continuation of yesterday's selling after facing continued pressure in the overnight futures market. Treasury futures maintained a narrow range through the early part of the night, falling to lows in early morning trade alongside a spike in the price of oil. These moves followed news that Iran continued attacking cargo ships in the Strait of Hormuz, prompting a response from the U.S., including the Treasury's decision to revoke Iran's permission to sell oil on the global market. President Trump, who was in Turkey for the conclusion of the NATO summit, said that he believes that the cease fire is now over. Crude oil is back near its 200-day moving average (74.18) while the U.S. Dollar Index is up 0.2% at 101.19.
• Yield Check:
  • 2-yr: +4 bps to 4.20%
  • 3-yr: +5 bps to 4.24%
  • 5-yr: +4 bps to 4.30%
  • 10-yr: +4 bps to 4.57%
  • 30-yr: +2 bps to 5.06%

• News:
  • The Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 2.50%, as expected.
  • Marine Le Pen confirmed that she will run in next year's presidential election in France after an appeals court ruled that her 15-month office ban has been served.
  • Chinese officials are reportedly looking to restrict foreign access to the country's top AI models.
  • Japan's May Current Account surplus reached JPY3.06 trln (expected surplus of JPY3.19 trln; last surplus of JPY4.21 trln). June Bank Lending was up 5.7% yr/yr (expected 5.8%; last 5.7%). June Economy Watchers Current Index rose to 44.0 from 43.6 (expected 44.3).
  • South Korea's May Current Account surplus reached $38.61 bln (last surplus of $28.29 bln).
  • Australia's May Building Approvals were down 1.1% m/m, as expected (last -0.2%) but up 5.3% yr/yr, as expected (last 10.9%).
  • France's May Current Account deficit narrowed to EUR100 mln from a deficit of EUR600 mln.
• Commodities:
  • WTI Crude: +5.0% to $73.97/bbl
  • Gold: -2.1% to $4072.20/ozt
  • Copper: -2.5% to $6.069/lb
• Currencies: 
  • EUR/USD: -0.1% to 1.1399
  • GBP/USD: -0.1% to 1.3336
  • USD/CNH: +0.1% to 6.8067
  • USD/JPY: +0.2% to 162.53
• Data out Today:
  • 7:00 ET: Weekly MBA Mortgage Index (actual -2.2%; prior 0.0%)
  • 10:00 ET: May Wholesale Inventories (Briefing.com consensus 0.3%; prior 0.6%)
  • 10:30 ET: Weekly crude oil inventories (prior -3.78 mln)
  • 14:00 ET: June FOMC Minutes
  • 15:00 ET: May Consumer Credit (Briefing.com consensus $18.9 bln; prior $20.7 bln)
• Treasury Auctions:
  • 13:00 ET: $39 bln 10-yr Treasury note reopening results