Bond Market Update

Pushing Higher

• U.S. Treasuries are on track for a higher start with longer tenors expected to show some relative strength in the early going. Treasury futures began rising in early evening trade, continuing their advance as the night went on with a push to fresh highs in recent action. An overnight pullback in crude oil has contributed to the advance while global equity markets have seen some renewed strength in technology stocks. Overnight action featured a rate hike in Hong Kong to follow in the Fed's footsteps while the Bank of England voted 6-3 to keep its bank rate at 3.75%. However, BoE Governor Bailey warned that a rate hike is possible if the Iran conflict is prolonged. The U.S. session will include the release of August Housing Starts (Briefing.com consensus 1.325 mln; prior 1.239 mln) and Building Permits (Briefing.com consensus 1.410 mln; prior 1.443 mln) at 8:30 ET. Crude oil is slipping toward $100/bbl while the U.S. Dollar Index is flat at 100.25.
• Yield Check:
  • 2-yr: -2 bps to 4.72%
  • 3-yr: -2 bps to 4.79%
  • 5-yr: -3 bps to 4.83%
  • 10-yr: -4 bps to 4.97%
  • 30-yr: -3 bps to 5.32%

• News:
  • The Hong Kong Monetary Authority followed the Fed's rate hike with a 25-basis point increase of its own to 4.25%.
  • China's foreign minister called for the U.S. and Iran to exercise rationality after his meeting with Iran's foreign minister.
  • European Central Bank policymaker Makhlouf repeated that second-round effects of inflation are not being seen.
  • Switzerland raised its 2026 growth forecast to 1.7% from 0.9% while the 2027 outlook remained at 1.6%.
  • Hong Kong's August Unemployment Rate rose to 3.8% from 3.7%.
  • Singapore's August trade surplus reached SGD13.78 bln (last surplus of SGD10.898 bln) as non-oil exports rose 10.9% m/m (last -0.3%), jumping 46.2% yr/yr (expected 35.0%; last 24.1%).
  • New Zealand's Q2 GDP expanded 0.2% qtr/qtr (expected 0.1%; last 0.9%), growing 2.6% yr/yr (expected 2.3%; last 1.7%). Q2 GDP Expenditure was up 0.4% qtr/qtr (last 1.1%).
  • Eurozone's August CPI was up 0.4% m/m (expected 2.9%; last 0.2%), rising 3.2% yr/yr (expected 3.3%; last 2.9%). August Core CPI was up 0.2% m/m, as expected (last 0.0%), rising 2.4% yr/yr, as expected (last 2.5%).
  • Swiss August trade surplus reached CHF3.786 bln (last surplus of CHF5.742 bln).
• Commodities:
  • WTI Crude: -1.7% to $100.76/bbl
  • Gold: -0.5% to $4365.00/ozt
  • Copper: +1.4% to $6.60/lb
• Currencies:
  • EUR/USD: +0.1% to 1.1489
  • GBP/USD: -0.1% to 1.3366
  • USD/CNH: -0.1% to 6.7072
  • USD/JPY: -0.3% to 155.83
• Data out Today:
  • 8:30 ET: August Housing Starts (Briefing.com consensus 1.325 mln; prior 1.239 mln), Building Permits (Briefing.com consensus 1.410 mln; prior 1.443 mln), weekly Initial Claims (Briefing.com consensus 209,000; prior 206,000), Continuing Claims (prior 1.774 mln), and September Philadelphia Fed survey (Briefing.com consensus 35.0; prior 47.4)
  • 10:00 ET: August Pending Home Sales (Briefing.com consensus 0.5%; prior -2.3%)
  • 10:30 ET: Weekly natural gas inventories (prior +40 bcf)