Today’s Market Update:

“Treasuries Slide With Core Europe; Long End Leads Selloff

By Edward Bolingbroke

(Bloomberg) —

Treasuries fall, trailing bigger declines in bunds and gilts, and curve steepens after flattening aggressively over past two weeks. Early pressure on bunds from French and Spanish supply increased following bobl block that weighed on belly of German curve.

  • UST yields higher by 1bp-3bp across 5s to 30s with front end marginally richer, steepening 2s10s by ~2.4bp; 5s30s wider by ~1.6bp and back above 34bp after declining for nine straight sessions
  • TIPS are steady vs nominals ahead of $16b 5-year TIPS new-issue auction at 1pm ET; outperformance so far this month pushed 5Y breakeven rate toward multi-year highs reached in early March following bigger-than-forecast increases in wages and consumer prices reported in February
  • Core Europe underperformance cheapens German 10Y by 1.7bp vs Treasuries, U.K. 10Y by 3.4bp after U.K. tapped 10/2028 for GBP2.5b
  • IG credit issuance slate includes Meiji Yasuda Life NC10 and EBRD 3Y; Morgan Stanley possible as it exits earnings black-out period
  • 3-month dollar Libor fixed +0.33bp at 2.35866%; around 14k EDM8 traded post-fix in move down to 97.625 lows
  • U.S. economic calendar includes initial jobless claims, April Philadelphia Fed business outlook (8:30am) and March leading index (10am)
  • Fed speakers include Brainard (8am), Quarles (9:30am) and Mester (6:45pm); Evans slated Friday”

Two-year Notes are up 0.2 basis points at 2.432%, five-year Notes are up 2.4 basis points at 2.755%, and the benchmark 10-Year Bond is up 3.3 basis points at 2.906%.

 

Treasury Yields

Term  Current  Last Month
3 Month1.805%1.756%
6 Month1.997%1.955%
2 Year2.432%2.307%
5 Year2.753%2.655%
10 Year2.904%2.855%
30 Year3.096%3.086%
Yields updated each morning.
Source: Bloomberg

Benchmarks

PRIME4.75%
DJIA24,748.07
Crude Oil$69.20
YEN107.3585
Gold$1,347.13
1 Year CMT2.17%
1 Month LIBOR1.89563%
Fed Funds Effective1.69%
Next FOMC MeetingMay 2, 2018
Source: Bloomberg

Economic Indicator Calendar

DateEventPeriodSurveyActualPrior
4/16/2018Empire ManufacturingApr18.415.822.5
Retail Sales Advance MoMMar0.40%0.60%-0.10%
Retail Sales Ex Auto MoMMar0.20%0.20%0.20%
Retail Sales Ex Auto and GasMar0.40%0.30%0.30%
Retail Sales Control GroupMar0.40%0.40%0.00%
Business InventoriesFeb0.60%0.60%0.60%
NAHB Housing Market IndexApr706970
Total Net TIC FlowsFebN/A$44.7b$122.6b
Net Long-term TIC FlowsFebN/A$49.0b$61.4b
4/17/2018Housing StartsMar1267k1319k1295k
Housing Starts MoMMar2.50%1.90%-3.30%
Building PermitsMar1321k1354k1321k
Building Permits MoMMar0.00%2.50%-4.10%
Industrial Production MoMMar0.30%0.50%1.00%
Manufacturing (SIC) ProductionMar0.10%0.10%1.50%
Capacity UtilizationMar77.90%78.00%77.70%
4/18/2018MBA Mortgage Applications13-AprN/A4.90%-1.90%
4/19/2018Initial Jobless Claims14-Apr230k232k233k
Continuing Claims7-Apr1845k1863k1878k
Philadelphia Fed Business OutlookApr21.023.222.3
Bloomberg Economic ExpectationsAprN/A52.556.0
Bloomberg Consumer Comfort15-AprN/A58.158.0
Leading IndexMar0.30%0.30%0.70%
Source: Bloomberg