Bond Market Update

No Real Change

• Treasuries haven't deviated from today's trend, which has seen the back end of the curve outperform the front of the curve with a downshift in both geopolitical angst and inflation angst.
• Something else that hasn't changed much are the market's rate cut expectations. According to the CME FedWatch Tool, the fed funds futures market is assigning a 90.1% probability to a 25-basis points cut at the November FOMC meeting and an 82.5% probability to another 25-basis points cut at the December FOMC meeting.
• For this week, it will be the ECB in the spotlight with a meeting on Thursday where it is expected to cut its key policy rates by 25 basis points.
• Yield check:
  • 2-yr: +2 bps to 3.96%
  • 3-yr: +1 bp to 3.87%
  • 5-yr: -2 bps to 3.86%
  • 10-yr: -3 bps to 4.04%
  • 30-yr: -6 bps to 4.32%