|10-Year: -3/32....%.... GNMAs: .... USD/JPY: 109.64.... EUR/USD: 1.1202|
-- Treasuries pull back with shorter tenors leading the way
-- 8:30 ET: Weekly Initial Claims (actual 212,000; Briefing.com consensus 222,000; prior 228,000), Continuing Claims (actual 1.660 mln; prior 1.688 mln), April Housing Starts (actual 1.235 mln; Briefing.com consensus 1.200 mln; prior 1.168 mln), Building Permits (actual 1.296 mln; Briefing.com consensus 1.280 mln; prior 1.288 mln), and May Philadelphia Fed Survey (actual 16.6; Briefing.com consensus 7.5; prior 8.5)
Short End Dips
- U.S. Treasuries are on track to surrender a portion of yesterday's gains at the cash open. Treasury futures ticked above yesterday's highs in overnight trade, but that's where the market found resistance. The selling pressure intensified as attention turned to Europe, leaving Treasury futures on their lows at this juncture. Last night's release of net Long-Term TIC Flows for March showed that China reduced its holdings of U.S. Treasuries to a two-year low but even with the March decrease, China remains the top holder of Treasuries. Overnight, China's Foreign Ministry spokesperson, Geng Shuang, said the CCP has full confidence in the Chinese economy while Ministry of Commerce spokesperson, Gao Feng, called on the United States to cancel tariffs on imports from China in order to avoid causing a "recession-like" impact on the world economy. The U.S. Dollar Index is little changed at 97.60.
- Yield Check:
- 2-yr: +2 bps to 2.18%
- 3-yr: +2 bps to 2.14%
- 5-yr: +1 bp to 2.16%
- 10-yr: UNCH at 2.38%
- 30-yr: UNCH at 2.82%
- Yonhap reported that President Trump will visit South Korea and meet with President Moon Jae-in in June.
- China's April House Prices increased 10.7% yr/yr (last 10.6%)
- Australia's April Employment Change totaled 28,400 (expected 15,200; last 25,700) while full employment decreased by 6,300 (last 48,300). April Participation Rate ticked up to 65.8% (expected 65.7%) from 65.7% while April Unemployment Rate increased to 5.2% (expected 5.0%) from 5.1%. May MI Inflation Expectations slowed to 3.3% from 3.9%.
- The European Commission fined Citigroup, JPMorgan Chase, RBS, Barclays, and MUFG a total of $1.20 bln for colluding in the spot foreign exchange market.
- British Prime Minister Theresa May's Brexit deal is reportedly on track for another defeat in the House of Commons.
- France's Q1 Unemployment Rate decreased to 8.7% from 8.8%.
- WTI Crude: +1.3% to $62.84/bbl
- Gold: -0.2% to $1294.70/ozt
- Copper: +0.8% to $2.76/lb
- EUR/USD: UNCH at 1.1202
- GBP/USD: -0.3% to 1.2810
- USD/CNH: +0.1% to 6.9110
- USD/JPY: +0.1% to 109.64
- Data out Today:
- 8:30 ET: Weekly Initial Claims (Briefing.com consensus 222,000; prior 228,000), Continuing Claims (prior 1.684 mln), April Housing Starts (Briefing.com consensus 1.200 mln; prior 1.139 mln), Building Permits (Briefing.com consensus 1.280 mln; prior 1.269 mln), and May Philadelphia Fed Survey (Briefing.com consensus 7.5; prior 8.5)
- 10:30 ET: Weekly natural gas inventories (prior 85 bcf)
- Fed Speakers:
- 12:05 ET: Minneapolis Fed President (non-voter) Neel Kashkari
- 12:15 ET: Governor (FOMC voter) Lael Brainard