Bond Market Update

Overnight Rally Stalls

• U.S. Treasuries performed well overnight, as oil prices moved lower, but there was no follow-through in the cash session. Buying efforts waned even though oil prices continued to move lower. Stocks took full advantage of that move, trending higher throughout the day, led by semiconductor stocks and mega-cap stocks. The front of the curve underperformed longer-dated securities, with the 2s10s spread narrowing five basis points to 21 basis points. There was no U.S. economic data of today, and there won't be any on Tuesday either. Tuesday's session will feature a $69 billion 2-yr note auction.
• Yield Check:
  • 2-yr: +1 bp to 4.75%
  • 3-yr: -1 bp to 4.82%
  • 5-yr: -3 bps to 4.83%
  • 10-yr: -4 bps to 4.96%
  • 30-yr: -3 bps to 5.30%

• News:
  • The U.S., Denmark, and Greenland have worked out an agreement whereby the U.S. can develop a significant military presence in Greenland and block others from doing the same.
  • President Trump threatens an attack on Iran but says he is open to meeting Iran's president at this week's United Nations General Assembly. CNBC
  • President Trump to meet with Ukraine President Volodymyr Zelensky in New York on Tuesday, according to Axios
  • President Trump will be announcing, in the near future, the AI 'Czar.' Truth Social
  • President Trump reiterates he 'will only encourage AI'
  • Treasury Secretary Bessent labeled his meeting with Chinese Vice Premier He Lifeng as "successful" ahead of the September 24 Trump-Xi meeting. CNBC
  • USTR Greer says the "Trump Administration is creating more balanced trade with China to advance our economic interests and secure lasting benefits for American workers." X post
  • Minneapolis Fed President Kashkari (FOMC voter) says inflation is in "all aspects of the economy." Bloomberg
  • Chicago Fed President Austan Goolsbee (not a voting FOMC member) says persistent supply shocks may require Fed to act on inflation
  • Houthis launched a weekend attack on Riyadh. Reuters
  • Saudi Arabia managed to export nearly 3.0 million barrels of oil per day the last six days via the Strait of Hormuz. Oilprice.com
  • After president bans CNN, TV pool at White House says it will not cover the president. CNBC
  • CNN, MSNOW and Politico to sue over White House access. CNN
  • FAA ordered ground stops at several East Coast airports, as a backup fiber line cut by construction crew prevented proper air traffic control
• Commodities:
  • WTI crude: -4.5% to $95.77/bbl
  • Gold: -1.0% to $4,381.10/ozt
  • Copper: +1.1% to $6.76/lb
• Currencies:
  • EUR/USD: -0.2% to 1.1466
  • GBP/USD: -0.2% to 1.3372
  • USD/CNH: flat at 6.6927
  • USD/JPY: +0.4% to 157.48
• The Day Ahead:
  • There is no U.S. economic data of note
  • 13:00 ET: $69 billion 2-yr note auction