Delayed CPI Data to be Released Friday

Longer-dated yields edge lower amid falling oil prices. UST yields traded in a tight 3-4 bp range today in the absence of economic data and Fed commentary. The front end of the curve ended flat, with the 2-year yield at 3.45%. Meanwhile, the longer-end declined as lower oil prices helped relieve inflation concerns, which comes ahead of delayed CPI data on Friday. The 10-year yield declined 3 bps on the day to 3.98% while the 30-year yield declined 4 bps to close at 4.57%. Elsewhere, equities rallied as a strong earnings season continues, with the S&P 500 and NASDAQ closing 1.07% and 1.37% higher.

US and Argentina sign $20 billion currency swap deal. The Central Bank of Argentina announced today that it signed a $20 billion currency swap line with the US in an effort to stabilize its economy. The deal comes as US Treasury Secretary Bessent has been working closely with Argentina to restore financial stability, as the US has been buying pesos over the past few weeks, and a debt facility is in the works. The peso rose in the immediate aftermath of the announcement, though price action quickly reversed course as the US Treasury has not yet released its own statement on the deal and Argentina’s announcement lacked clarity on specific details. The peso closed the day above 1,477 per USD, well below October’s strongest level of 1,349 per USD.

US makes rare earths agreement with Australia in move to counter China. The US and Australia announced an agreement today aiming to boost access to rare earth minerals and counter China’s near monopoly of the critical good. Both the US and Australia have committed more than $1 billion in investments over the next six months, with initial projects set to kick off in both countries. The investments are the beginning of a $8.5 billion “ready-to-go” Australian pipeline, according to Prime Minister Anthony Albanese. In addition to goods exports, Albanese also said his country has the ‘capacity’ to expand mineral processing, a critical supply chain component that is currently 90% controlled by China. Australian expansion is seen as a key step in diversifying the US away from China, and comes as both the US and Australia pledge to protect their markets from “unfair trade practices.”