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Bond Market Update from Briefing.com

Bond Market Update from Briefing.com

8:46 am -

Core Yields Inch Lower

  • The first half of the European session has been underscored by slim gains in core debt. Today's modest gains come after nearly a week of sideways action. The euro has shed 0.3% to 1.1810 against the U.S. dollar after hitting a 19-month high yesterday. British Chancellor Philip Hammond pushed back against suggestions that Brexit may be delayed or postponed. European economic data showed mostly disappointing revisions to Manufacturing PMI readings, but the figures remained in expansion despite pulling back.
  • Economic Data:
    • Eurozone Q2 GDP +0.6% quarter-over-quarter, as expected (last 0.5%); +2.1% year-over-year (consensus 2.4%; last 1.9%). July Manufacturing PMI 56.6 (expected 56.8; last 56.8)
    • Germany's July Manufacturing PMI 58.1 (expected 58.3; last 58.3). July Unemployment Change -9,000 (consensus -5,000; last 6,000) and Unemployment Rate held at 5.7%, as expected
    • UK's July Manufacturing PMI 55.1 (expected 54.4; last 54.2). July Nationwide HPI +0.3% month-over-month (expected -0.1%; last 1.1%); +2.9% year-over-year (consensus 2.7%; last 3.1%)
    • France's July Manufacturing PMI 54.9 (expected 55.4; last 55.4)
    • Italy's July Manufacturing PMI 55.1 (consensus 55.2; last 55.2)
    • Spain's July Manufacturing PMI 54.0 (expected 54.5; last 54.7)

  • New Issuance:
  • Germany sold EUR3.20 billion of 2-year Schatz bonds at a yield of -0.63% with a bid-to-cover of 2.0
  • UK's GBP2.25 billion 10-yr gilt reopening drew a yield of 1.267% with a bid-to-cover of 2.56
  • Yield Check:
  • France, 10-yr OAT: -1 bp to 0.79%
  • Germany, 10-yr bund: -1 bp to 0.52%
  • Greece, 10-yr note: +1 bp to 5.21%
  • Italy, 10-yr BTP: -1 bp to 2.08%
  • Portugal, 10-yr PGB: +1 bp to 2.87%
  • Spain, 10-yr ODE: UNCH at 1.49%
  • U.K., 10-yr gilt: +1 bp to 1.24%
  • 8:12 am -

    Little Changed Once Again

    • U.S. Treasuries have spent the night inside a narrow range, which leaves the market on track for a flat start. However, some movement is expected to follow the 8:30 ET release of June Personal Income (Briefing.com consensus 0.3%), Personal Spending (Briefing.com consensus 0.1%), and core PCE Prices (Briefing.com consensus 0.1%). Treasuries held their ground overnight, showing little reaction to Asian economic data, which showed below-consensus Manufacturing PMI readings from Japan and India while China's Caixin Manufacturing PMI beat expectations after the official reading missed estimates on Monday. The Reserve Bank of Australia held its cash rate at 1.50%, as expected. The central bank's statement noted that strength of the Australian dollar is mostly due to the underperformance of the greenback. The S&P 500 futures trade five points above fair value while crude oil is down 0.6% at $49.89/bbl. The Dollar Index is up 0.1% after ending yesterday's session at its lowest level since May 2016.
    • Yield Check:
      • 2-yr: UNCH at 1.36%
      • 5-yr: +1 bp to 1.84%
      • 10-yr: UNCH at 2.30%
      • 30-yr: UNCH at 2.90%
      • International News:
        • Japan's July Manufacturing PMI 52.1 (expected 52.2; last 52.2)
        • China's July Caixin Manufacturing PMI 51.1 (consensus 50.4; last 50.4)
        • India's Nikkei July Manufacturing PMI 47.9 (expected 50.8; last 50.9)
        • South Korea's July Nikkei Manufacturing PMI 49.1 (last 50.1) Australia's July AIG Manufacturing Index 56.0 (last 55.0) South Korea's July CPI +0.2% month-over-month (last -0.1%); +1.9% year-over-year (consensus 2.0%; last 1.9%). July trade surplus narrowed to KRW10.65 billion from KRW10.77 billion. July Imports +14.5% year-over-year (last 19.8%) and July Exports +19.5% year-over-year (last 13.6%)
        • Eurozone Q2 GDP +0.6% quarter-over-quarter, as expected (last 0.5%); +2.1% year-over-year (consensus 2.4%; last 1.9%). July Manufacturing PMI 56.6 (expected 56.8; last 56.8)
        • Germany's July Manufacturing PMI 58.1 (expected 58.3; last 58.3). July Unemployment Change -9,000 (consensus -5,000; last 6,000) and Unemployment Rate held at 5.7%, as expected

      • Data out Today:
      • June Personal Income (Briefing.com consensus 0.3%), Personal Spending (Briefing.com consensus 0.1%), core PCE Prices (Briefing.com consensus 0.1%) at 8:30 ET
      • June Construction Spending (Briefing.com consensus 0.5%) at 10:00 ET
      • July ISM Index (Briefing.com consensus 56.2) at 10:00 ET July auto and truck sales reported throughout the day