Bond Market Update

Short End Lags

• U.S. Treasuries continue trading in mixed fashion with the 2-yr note sitting just above its morning low after solid economic data while longer tenors have done a better job recovering off their lows, but they have not made it back to their opening levels. Meanwhile, equities are hanging onto modest gains in the S&P 500 (+0.4%) and Nasdaq (+0.3%) while the Dow (+0.8%) and Russell 2000 (+1.6%) outperform. Barring some late volatility, the 2-yr yield is on track to end the week with a seven-basis point increase while the 10-yr yield is down two basis points for the week. As a result, the 2s10s spread has tightened to just four basis points over the course of this week.
• Yield Check:
  • 2-yr: +2 bps to 4.37%
  • 3-yr: +1 bp to 4.31%
  • 5-yr: -1 bp to 4.30%
  • 10-yr: -2 bps to 4.41%
  • 30-yr: -3 bps to 4.59%