Bond Market Update

Breakout

• No sooner had we talked about the market sticking to tight trading ranges that there was a breakout to the upside for longer-dated yields. 
• There was no news catalyst for the uptick in selling interest that has led to a further steepening in the yield curve. 2s10s spread now 34 basis points after going out yesterday at 30 basis points.
• Stocks concurrently moved to session lows with the mega-cap stocks pacing the downside for the major indices (Nasdaq -0.5% and S&P 500 -0.2%). Small caps and mid caps continue to exhibit relative strength, but have also moved well off prior session highs.
• The U.S. Dollar Index continues to strengthen, now up 0.4% to 108.54.
• Yield check:
  • 2-yr: -1 bp to 4.24%
  • 3-yr: +1 bp to 4.29%
  • 5-yr: +3 bps to 4.40%
  • 10-yr: +3 bps to 4.58%
  • 30-yr: +3 bps to 4.79%