Bond Market Update

Short End Maintains Lead

• U.S. Treasuries hover just below their morning highs after a steady rise off their starting lows. The trading day started with slight losses in the 5-yr note and longer tenors, but the entire complex climbed out of the gate, extending to fresh highs after the 8:30 ET release of the Housing Starts (1.354 mln; Briefing.com consensus 1.350 mln) and Building Permits (1.428 mln; Briefing.com consensus 1.455 mln) report for September, which showed above-consensus starts coupled with some softness in permits. The post-data advance is lifting 10s and 30s off their lowest levels of the month while shorter tenors found support a bit above their lows from last week. Equities are off to a mixed start with the S&P 500 (+0.2%) trading ahead of the Dow (-0.4%).
• Yield Check:
  • 2-yr: -4 bps to 3.95%
  • 3-yr: -4 bps to 3.86%
  • 5-yr: -3 bps to 3.88%
  • 10-yr: -3 bps to 4.07%
  • 30-yr: -2 bps to 4.37%