Bond Market Update

Updated: 24-Dec-24 14:06 ET

Treasury Market Summary

Opening Slip Reversed Ahead of Christmas Closure

U.S. Treasuries ended the abbreviated Tuesday session on a modestly higher note after recovering from a soft start. The trading day started with modest losses that were extended in early action. The selling lifted yields on the 5-yr note and longer tenors to fresh highs for the month, but the entire complex raced back after the U.S. Treasury sold $70 bln in 5-yr notes to strong demand, making for the second strong auction in a row. The post-auction climb continued into the close, leaving the market on highs ahead of tomorrow's Christmas Day closure. Thursday will bring another auction with the U.S. Treasury scheduled to sell $44 bln in 7-yr notes. Crude oil climbed back above its 50-day moving average (69.68) while the U.S. Dollar Index rose 0.2% to 108.25. Merry Christmas!
Yield Check:
- 2-yr: -1 bp to 4.34%
- 3-yr: UNCH at 4.37%
- 5-yr: -1 bp to 4.44%
- 10-yr: -1 bp to 4.59%
- 30-yr: -2 bps to 4.76%

News:
- France's new Finance Minister Lombard pledged to cut the budget deficit without impacting growth.
- Honda signed an agreement to consider integration with Nissan and announced a buyback.
- The Reserve Bank of Australia released its latest policy minutes, setting the stage for rate cuts if the economy continues evolving in line with or below expectations.
- Japan's October BoJ Core CPI was up 1.7% yr/yr (expected 1.5%; last 1.5%).
- South Korea's December Consumer Confidence fell to 88.4 from 100.7.
Today's Data:
- $70 bln 5-year Treasury note auction results (prior 12-auction average):
  - High yield: 4.478% (4.131%).
  - Bid-to-cover: 2.40 (2.39).
  - Indirect bid: 67.3% (67.8%).
  - Direct bid: 20.3% (17.5%).
Commodities:
- WTI crude: +1.2% to $70.05/bbl
- Gold: +0.3% to $2634.90/ozt
- Copper: +0.5% to $4.11/lb
Currencies:
- EUR/USD: -0.1% to 1.0392
- GBP/USD: UNCH at 1.2531
- USD/CNH: UNCH at 7.3053
- USD/JPY: +0.1% to 157.31
The Day Ahead:
- 8:30 ET: Weekly Initial Claims (Briefing.com consensus 232,000; prior 220,000) and Continuing Claims (prior 1.874 mln)
Treasury Auctions:
- 13:00 ET: $44 bln 7-yr Treasury note auction results