Bond Market Update

On the Rise

• U.S. Treasuries trade on their highs after a steady rise off their opening levels. The trading day started with modest gains in the 10-yr note and shorter tenors, but the entire complex spent the initial 90 minutes in a steady rise. Economic data released this morning showed a smaller than expected uptick in weekly jobless claims (to 221,000 from 218,000; Briefing.com consensus 222,000) and a preliminary reading of the Q3 Productivity/unit labor cost report that featured a smaller than expected increase in productivity (2.2%; Briefing.com consensus 2.3%) and a bigger than expected rise in labor costs (1.9%; Briefing.com consensus 0.5%). The report also included a notable revision to the unit labor cost reading for Q2 (to 2.4% from 0.4%) while Q2 productivity was revised down to 2.1% from 2.5%. The early advance has helped yields on shorter tenors reverse some of their increase from yesterday, but additional volatility could be injected into today's action when the market hears from Fed Chairman Powell, who will speak after what is expected to be a 25-bps rate cut announcement at 14:00 ET. Equities are off to a mostly higher start with the Nasdaq (+1.1%) in the lead while the Russell 2000 (-0.2%) is giving back a slight portion of yesterday's big rally that has the index up 8.1% for the week versus a 5.2% week-to-date gain in the Nasdaq.
• Yield Check:
  • 2-yr: -6 bps to 4.21%
  • 3-yr: -6 bps to 4.17%
  • 5-yr: -7 bps to 4.21%
  • 10-yr: -6 bps to 4.37%
  • 30-yr: -4 bps to 4.57%