Bond Market Update from Briefing.com

July 27, 2016
Bond Market Update from Briefing.com

8:34 am -

  • U.S. Treasuries have inched up following the release of weaker than expected Durable Orders for June. The report showed a headline decrease of 4.0% (Briefing.com consensus -1.0%) while Durable orders ex-transportation declined 0.5% (Briefing.com consensus 0.2%).
  • The 10-yr note climbed ahead of the news, hitting a session high immediately after the data crossed. Similarly, the 30-yr bond moved to a fresh high while short-dated issues remain near their flat lines.
  • Yield Check:
    • 2-yr: -1 bp to 0.75%
    • 5-yr: UNCH at 1.14%
    • 10-yr: -1 bp to 1.55%
    • 30-yr: -2 bps to 2.26%

    8:07 am -

    European Debt Meets Modest Demand

    • Market participants have shown demand for sovereign debt this morning with yields slipping across the region. Concerns about Italian banks have been quickly relegated to the backburner after it was reported that Banca Monte dei Paschi di Sienna is looking to raise EUR5 billion by the end of this week. In other banking news, Deutsche Bank has slumped more than 3.0% after disappointing results.
    • Economic data:
      • Eurozone Private Sector Loans +1.7% year-over-year, as expected (previous 1.6%) and M3 Money Supply +5.0% year-over-year, as expected (last 4.9%)
      • Germany's August GfK Consumer Climate 10.0 (expected 9.9; last 10.1). June Import Price Index +0.5% month-over-month (expected 0.6%; last 0.9%); -4.6% year-over-year, as expected (last -5.5%)
      • UK's Q2 GDP +0.6% quarter-over-quarter (expected 0.4%; last 0.4%); +2.2% year-over-year (consensus 2.0%; last 2.0%). July CBI Distributive Trades Survey -14 (expected 1; last 4)
      • France's June PPI +0.4% month-over-month and July Consumer Confidence ticked down to 96 from 97, as expected
      • Swiss June Consumption Indicator 1.34 (last 1.24)
      • Spain's June Retail Sales +5.6% year-over-year (consensus 3.3%; last 2.3%)
      • Italy's July Consumer Confidence 111.3 (consensus 109.2; last 110.2) and Business Confidence 103.1 (expected 101.8; previous 102.9)

    • Yield Check:
    • France, 10-yr OAT: -2 bps to 0.18%
    • Germany, 10-yr Bund: -1 bp to -0.04%
    • Greece, 10-yr Note: +2 bps to 8.01%
    • Italy, 10-yr BTP: -1 bp to 1.25%
    • Portugal, 10-yr PGB: UNCH at 3.02%
    • Spain, 10-yr ODE: -1 bp to 1.11%
    • UK, 10-yr Gilt: -4 bps to 0.79%
    • 7:46 am -

      Treasuries Maintain Slim Ranges Ahead of Fed

      • U.S. Treasuries spent the overnight session inside narrow ranges, seeing some selling after reports from Japan indicated the country's government is preparing a JPY28 trillion fiscal stimulus package. However, that brief wave of selling has been retraced completely over the past few hours, leaving the 10-yr note just below its flat line. The long bond holds a slim gain while the 5-yr note hovers in the red ahead of the latest FOMC policy decision, which will be released at 14:00 ET.
      • Australia reported its latest inflation data overnight with Q2 CPI rising 0.4% quarter-over-quarter, as expected (last -0.2%); +1.0% year-over-year (consensus 1.1%; last 1.3%). Q2 Trimmed Mean CPI increased 0.5% quarter-over-quarter (expected 0.4%; last 0.2%)
      • The S&P 500 futures hold a modest gain while Nasdaq futures outperform thanks to better than expected earnings from Apple (AAPL). The Dollar Index has edged up 0.1% while crude oil is down 0.5% at $42.70/bbl. Gold futures are little changed at $1327.60/ozt.
      • Yield Check:
        • 2-yr: UNCH at 0.76%
        • 5-yr: +2 bps to 1.16%
        • 10-yr: UNCH at 1.57%
        • 30-yr: -1 bp to 2.28%

      • Economic data on Tap:
      • June Durable Orders (Briefing.com consensus -1.0%) and Durable Orders ex-transportation (Briefing.com consensus 0.2%) at 8:30 ET
      • June Pending Home Sales (Briefing.com consensus 1.1%) at 10:00 ET
      • Crude Inventories at 10:30 ET
      • July FOMC Rate Decision at 14:00 ET (no policy change expected)