Bond Market Update

Long End Ahead

• U.S. Treasuries are on track for a higher start in longer tenors while the short end is expected to show some early relative weakness. Treasury future climbed shortly after the open on Sunday night, reaching their best levels near the end of the Asian session. The next few hours saw sideways action, leaving futures a bit below their best levels of the night. Other sovereign debt has seen limited movement while global equity markets have been mixed. The overnight data slate was on the light side, giving the market little to chew on ahead of Treasury Secretary Bessent's 13:00 ET press conference to discuss the economic pressure campaign against Iran. Crude oil has slipped below $86/bbl while the U.S. Dollar Index is up 0.2% at 98.98.
• Yield Check:
  • 2-yr: UNCH at 4.23%
  • 3-yr: UNCH at 4.31%
  • 5-yr: -1 bp to 4.42%
  • 10-yr: -3 bps to 4.71%
  • 30-yr: -4 bps to 5.24%

• News:
  • Trade talks between Canada and the U.S. collapsed over the weekend, resulting in an implementation of a 50% tariff on some Canadian imports to the U.S. Canada will impose retaliatory tariffs on September 8.
  • Japan's Ministry of Finance is expected to set the assumed interest rate for FY27/28 at 3.8% for debt cost calculations.
  • Bank of Japan Deputy Governor Himino is expected to hint at more rate hikes during a speech scheduled for Thursday.
  • European Central Bank policymaker Cipollone said that he does not see any signs of stagflation.
  • Singapore's July CPI was down 0.2% m/m (last 0.0%) but up 2.2% yr/yr (last 1.9%).
  • New Zealand's Q2 Retail Sales fell 0.5% qtr/qtr (expected 0.1%; last 1.0%) and Core Retail Sales rose 0.7% qtr/qtr (expected 0.3%; last 1.1%).
• Commodities:
  • WTI Crude: -2.3% to $85.08/bbl
  • Gold: +0.8% to $4718.00/ozt
  • Copper: +0.2% to $6.599/lb
• Currencies:
  • EUR/USD: -0.1% to 1.1668
  • GBP/USD: UNCH at 1.3638
  • USD/CNH: +0.1% to 6.7232
  • USD/JPY: +0.1% to 159.06
• No Data on Today's Schedule