Bond Market Update

Opening Losses Extended

• U.S. Treasuries trade on their lows after adding to their initial losses. The market started the day in negative territory, facing continued selling through the next two hours, though at a measured pace. The early weakness has persisted even though the Import/Export Prices report for November did not show big jumps in prices, though readings for October were revised higher. With the early selling, the 2-yr yield is up 12 basis points for the week even though a 25-basis point rate cut is expected on Wednesday, while the 10-yr yield is up 22 basis points for the week.
• Import prices were up 0.1% in November after increasing a revised 0.1% (from 0.3%) in October. Excluding oil, import prices were unchanged after increasing 0.2% in October. Export prices were unchanged in November after increasing a revised 1.0% (from 0.8%) in October. Excluding agriculture, export prices were up 0.1% after increasing a revised 0.8% (from 0.6%) in October.
• Yield Check:
  • 2-yr: +3 bps to 4.22%
  • 3-yr: +3 bps to 4.20%
  • 5-yr: +4 bps to 4.22%
  • 10-yr: +4 bps to 4.37%
  • 30-yr: +4 bps to 4.58%