Bond Market Update

Still Sliding

• U.S. Treasuries have reached fresh low, having faced continued pressure since the cash start. Today's action has been a one-way street, putting the Treasury complex on track for the fifth consecutive day of losses even though the market is all but certain that the FOMC will announce a 25-basis point rate cut to a range of 4.25-4.50% on Wednesday. The 10-yr yield has increased by 24 basis points since last Friday's settlement and is now just 12 basis points below its peak from November 15. Meanwhile, the 2-yr yield is up 13 basis points for the week, which leaves it 16 basis points below its peak from November 25. The persistent weakness in Treasury notes and bonds is weighing on sentiment in equities with the S&P 500 (-0.2%) widening this week's loss to 0.9% while the Russell 2000 (-1.0%) is now down 3.0% for the week.
• Yield Check:
  • 2-yr: +4 bps to 4.23%
  • 3-yr: +4 bps to 4.21%
  • 5-yr: +7 bps to 4.24%
  • 10-yr: +7 bps to 4.39%
  • 30-yr: +6 bps to 4.61%