Bond Market Update

2-Yr Yield Slips Below 50-Day Average

• U.S. Treasuries have advanced in response to the jobs report for November, which showed above-consensus growth in nonfarm payrolls (227,000; Briefing.com consensus 200,000), a slight miss in nonfarm private payrolls (194,000; Briefing.com consensus 200,000), and an uptick in the Unemployment Rate to 4.2% from 4.1%, which was expected. Shorter tenors have been at the forefront of the post-data buying, pressuring the 2-yr yield past its 50-day moving average (4.114%) to a level not seen since the start of November. The 10-yr yield, meanwhile, has dipped to its lowest level since late October. Altogether, the market is now growing more confident about the prospect of a rate cut from the FOMC on December 18, as the implied likelihood of that move increases to 87.3% from 71.0% yesterday.
• Yield Check:
  • 2-yr: -6 bps to 4.09%
  • 3-yr: -6 bps to 4.04%
  • 5-yr: -5 bps to 4.03%
  • 10-yr: -4 bps to 4.15%
  • 30-yr: -1 bp to 4.32%