Bond Market Update

Short End Ahead

• U.S. Treasuries are on track for a mixed start with shorter tenors expected to show slight relative strength in the early going. Treasury futures saw limited movement during the Asian session, facing some pressure once the focus shifted to action in Europe. Treasuries bounced off lows during the past hour, lifting shorter tenors into positive territory while the long bond underperforms. Overnight action featured a limited slate of data and other news, leaving the market looking ahead to tomorrow's release of July CPI. The market received a better-than-expected NFIB Small Business Optimism Index for July (99.8; Briefing.com consensus 97.1; prior 97.4) and the July Existing Home Sales (Briefing.com consensus 4.07 mln; prior 4.09 mln) report will be released at 10:00 ET. Later in the day, the U.S. Treasury will sell $58 bln in 3-yr notes. Crude oil hovers near $82/bbl while the U.S. Dollar Index is flat at 99.85.
• Yield Check:
  • 2-yr: -1 bp to 4.23%
  • 3-yr: UNCH at 4.30%
  • 5-yr: UNCH at 4.41%
  • 10-yr: +1 bp to 4.71%
  • 30-yr: +2 bps to 5.26%

• News:
  • The Reserve Bank of Australia left its official cash rate at 4.35%, as expected, and its inflation outlook was little changed from May.
  • South Korea's exports through the first ten days of August were up 45.3% yr/yr with chip exports jumping 155.4%.
  • New Zealand's Prime Minister Luxon is reportedly facing growing displeasure within his party.
  • Sweden's National Institute of Economic Research raised its growth forecast for 2026 to 2.4% from 2.2% and kept its 2027 forecast for 2.8% growth.
  • Australia's July NAB Business Confidence remained at -6 and NAB Business Survey rose to 4 from 3.
  • Singapore's Q2 GDP expanded 1.4% qtr/qtr (expected 1.1%; last 1.2%), growing 5.9% yr/yr (expected 5.7%; last 6.3%).
  • Italy's June trade surplus reached EUR4.232 bln (expected surplus of EUR4.74 bln; last surplus of EUR4.946 bln) and EU trade surplus reached EUR1.58 bln (last surplus of EUR1.00 bln).
• Commodities:
  • WTI Crude: -0.1% to $82.05/bbl
  • Gold: +0.6% to $4446.00/ozt
  • Copper: +0.9% to $6.672/lb
• Currencies:
  • EUR/USD: UNCH at 1.1536
  • GBP/USD: -0.1% to 1.3494
  • USD/CNH: UNCH at 6.7456
  • USD/JPY: UNCH at 159.23
• Data out Today:
  • 6:00 ET: July NFIB Small Business Optimism Index (actual 99.8; Briefing.com consensus 97.1; prior 97.4)
  • 10:00 ET: July Existing Home Sales (Briefing.com consensus 4.07 mln; prior 4.09 mln)
• Treasury Auctions:
  • 13:00 ET: $58 bln 3-yr Treasury note auction results