Bond Market Update

Early Close Looms

• U.S. Treasuries hover just below their best levels of the session going into the final two hours of today's abbreviated affair ahead of tomorrow's holiday closure. Treasuries built on their starting gains in morning trade, lurching to fresh highs as the market received the ISM Non-Manufacturing Index for June (48.8%; Briefing.com consensus 52.5%), which showed an unexpected contraction in activity. The post-ISM rally sent yields on 5s and 10s back below their respective 200-day moving averages while the 30-yr yield marked a session low within a basis point of the 200-day moving average of its own. Equities are seeing some divergence as the S&P 500 (+0.3%) and Nasdaq (+0.7%) climb to fresh session highs while the Dow (-0.3%) has reached a fresh low in recent action.
• Yield Check:
  • 2-yr: -4 bps to 4.70%
  • 3-yr: -6 bps to 4.49%
  • 5-yr: -7 bps to 4.33%
  • 10-yr: -8 bps to 4.36%
  • 30-yr: -7 bps to 4.54%