Bond Market Update

Steady Start Ahead

• U.S. Treasuries are on track for a slightly higher start in longer tenors after a subdued start to the week in the futures market. Treasury futures inched higher in early evening action, but the gains faded during the Asian session, leaving the market in a narrow sideways range that has held into early morning trade while other sovereign debt has faced some pressure. Crude oil has maintained an upward path, rising back toward last week's high amid no meaningful improvement in the conflict with Iran. Overnight action featured some weakness in global chip and tech stocks amid signs that large U.S. tech companies may slow their development of AI models. Today's U.S. session will not include any data. The U.S. Dollar Index is up 0.4% at 99.53 with the greenback reaching a one-month high against the euro.
• Yield Check:
  • 2-yr: UNCH at 4.64%
  • 3-yr: UNCH at 4.73%
  • 5-yr: +1 bp to 4.80%
  • 10-yr: -1 bp to 4.97%
  • 30-yr: UNCH at 5.35%

• News:
  • Japan's chief cabinet secretary said that JGB issuance will be controlled through the initial and extra budgets.
  • European Central Bank policymakers Kazaks, Kazimir, and Simkus are leaving the door open to additional rate hikes.
  • China's August New Loans reached CNY60.0 bln (expected CNY480.0 bln; last -CNY340.0 bln), August Outstanding Loans grew 5.0% yr/yr (expected 5.1%; last 5.1%), and August total social financing CNY1.660 trln (expected CNY2.04 trln; last CNY660.0 bln).
  • Japan's July Industrial Production -0.2% m/m (expected 0.1%; last 1.9%) and Capacity Utilization 0.5% m/m (last 4.1%).
  • Hong Kong's Q2 PPI 13.1% yr/yr (last 17.7%). Q2 Industrial Production 2.3% yr/yr (last 3.2%).
  • New Zealand's August Performance of Services Index 51.2 (last 50.6). July Visitor Arrivals 0.5% m/m.
  • India's August WPI Inflation 9.92% yr/yr (expected 9.89%; last 9.78%) and August CPI 4.98% (expected 4.80%; last 4.44%)
  • Swiss August PPI was up 0.7% m/m (expected 0.1%; last -0.1%) but down 0.7% yr/yr (last -2.1%).
• Commodities:
  • WTI Crude: +3.1% to $103.13/bbl
  • Gold: -1.7% to $4334.00/ozt
  • Copper: -2.0% to $6.42/lb
• Currencies: 
  • EUR/USD: -0.4% to 1.1546
  • GBP/USD: -0.2% to 1.3486
  • USD/CNH: UNCH at 6.7096
  • USD/JPY: +0.7% to 154.60
• No Data on Today's Schedule