Bond Market Update

Supported by Dovish Powell Comments

• U.S. Treasuries have extended to fresh highs with shorter tenors leading the advance. The market is responding to comments from Fed Chairman Powell, who said that the time has come for a policy adjustment. He added that the central bank will do everything to support a strong labor market and that a good deal of progress has been made toward the goal of price stability. The dovish tone has sent yields past yesterday's intraday lows with this week's lows looming not far below even though the just-released New Home Sales report for July (739,000; Briefing.com consensus 628,000) beat expectations by a wide margin and included an upward revision to June's reading (to 668,000 from 617,000). Equities are off to a strong start with the S&P 500 (+1.0%) now up 1.3% for the week.
• Yield Check:
  • 2-yr: -7 bps to 3.94%
  • 3-yr: -7 bps to 3.75%
  • 5-yr: -7 bps to 3.66%
  • 10-yr: -7 bps to 3.80%
  • 30-yr: -4 bps to 4.09%