Bond Market Update

Yields climbing

• Treasuries are experiencing a trend down day (price) and a trend up day (yield). Still no break in the action as the 10-yr note pushes 4.18%, after settling Friday at 4.07%, and the 2-yr note hits 4.02%, after settling Friday at 3.95%. The 30-yr bond is at 4.48% after settling Friday at 4.38%.
• Hard to pinpoint the specific reason for today's weakness. Ostensible factors include a recalibration of the growth outlook for something better than expected, worries about easy financial conditions igniting inflation again, a re-think of the rate cut cadence, and/or deficit concerns.
• The move up in yields has created some indigestion for stocks. The major indices are all lower with the small-cap Russell 2000 (-1.5%) down the most. The rate-sensitive S&P 500 real estate sector (-1.8%) is today's worst-performing sector.
• Yield check:
  • 2-yr: +7 bps to 4.02%
  • 3-yr: +9 bps to 3.95%
  • 5-yr: +9 bps to 3.97%
  • 10-yr: +11 bps to 4.18%
  • 30-yr: +10 bps to 4.48%