>>> Overnight Treasury Market Summary

Overnight Treasury Market Summary
Dipping Lower
  • U.S. Treasuries are on track for a mostly lower start with longer tenors expected to show some relative weakness in the early going. Treasury futures held their ground in early evening action, briefly rising to highs at the start of the Asian session before finding renewed pressure that continued through the night, producing lows during the past 90 minutes of action. The overnight retreat took place alongside a mixed showing from Asian equities and losses in most other sovereign debt. Australia's Q3 CPI was a bit hotter than expected, prompting renewed speculation about another rate hike in November. Meanwhile in Europe, economists from Germany's ifo Institute noted that the services sector is stabilizing and could grow slightly in Q4 and that the European Central Bank could cut rates in the second half of 2024. The European Central Bank will hold its next policy meeting tomorrow, but the market does not expect a rate hike, which would make for the first pause in ten meetings. Crude oil is little changed after three down days while the U.S. Dollar Index is up 0.2% at 106.46. The U.S. Treasury will follow yesterday's solid 2-yr note sale with a $52 bln 5-yr note offering.
  • YieldCheck:
    • 2-yr: -1 bp to 5.09%
    • 3-yr: +1 bp to 4.92%
    • 5-yr: +2 bps to 4.84%
    • 10-yr: +2 bps to 4.86%
    • 30-yr: +3 bps to 4.99%
  • News:
    • China's President Xi visited the People's Bank of China for the first time since taking office.
    • China's National Development Reform Commission said that crude oil processing capacity will be limited to one billion metric tons by 2025.
    • Reserve Bank of Australia Governor Bullock said that inflation could prove more stubborn than expected, prompting more rate hikes from the central bank. ANZ and Commonwealth Bank of Australia now expect that the RBA will hike rates again in November.
    • Deutsche Bank beat quarterly expectations and revealed plans to return more capital to shareholders.
    • Japan's August Leading Index rose to 109.2 from 108.2 (expected 109.5) and Coincident Indicator was up 0.4% m/m (last 0.1%).
    • South Korea's October Consumer Confidence slipped to 98.1 from 99.7.
    • Australia's Q3 CPI was up 1.2% qtr/qtr (expected 1.1%; last 0.8%), rising 5.4% yr/yr (expected 5.3%; last 6.0%). September Monthly CPI Indicator was up 5.6% yr/yr (expected 5.4%; last 5.2%).
    • Eurozone's September Private Sector Loans were up 0.8% yr/yr (expected 1.0%; last 1.0%) and loans to nonfinancials were up 0.2% (last 0.6%).
    • Germany's October ifo Business Climate rose to 86.9 from 85.8 (expected 85.9). October Current Assessment rose to 89.2 from 88.7 (expected 88.5) and Business Expectations rose to 84.7 from 83.1 (expected 83.3).
    • Spain's September PPI was down 8.6% yr/yr (last -9.9%).
    • Swiss October ZEW Expectations fell to -37.8 from -27.6.
  • Commodities:
    • WTI Crude: -0.1% to $83.71/bbl
    • Gold: +0.1% to $1987.00/ozt
    • Copper: -0.5% to $3.607/lb
  • Currencies:
    • EUR/USD: -0.2% to 1.0572
    • GBP/USD: -0.4% to 1.2117
    • USD/CNH: +0.2% to 7.3251
    • USD/JPY: +0.1% to 149.91
  • DataToday:out
    • 7:00 ET: Weekly MBA Mortgage Index (actual -1.0%; prior -6.9%)
    • 10:00 ET: September New Home Sales (Briefing.com consensus 683,000; prior 675,000)
    • 10:30 ET: Weekly crude oil inventories (prior -4.49 mln)
  • TreasuryAuctions:
    • 13:00 ET: $52 bln 5-yr Treasury note auction results