Bond Market Update

Some protective cover

• Treasury market experiencing some deja vu today. There was weakness overnight that took yields higher. The 10-yr peeked its head above 4.61%, but then selling interest faded and yields dropped back down.
• The 10-yr is currently at 4.58%, unchanged for the session and moving without much news of note to account for the swings, although stocks are weak today with mega-cap shares running into profit-taking efforts.
• Trading conditions are thin, which can inject some volatility into a market, yet we would point out that the CBOE Volatility Index is up 23.2% today to 18.14 as equity investors, utilizing options, are aiming to hedge portfolios against possible downside risk in the next 30 days.
• Treasuries, then, are possibly benefiting from some safe-haven buying.
• Yield check:
  • 2-yr: -2 bps to 4.31%
  • 3-yr: -2 bps to 4.33%
  • 5-yr: -1 bp to 4.42%
  • 10-yr: unch at 4.58%
  • 30-yr: +2 bps to 4.78%