Bond Market Update

Opening Levels Revisited

• U.S. Treasuries are little changed after a sideways start to the Friday session that precedes a three-day weekend. The 10-yr note and the long bond started the day in positive territory, but the entire complex dipped from its starting levels after the Personal Income/Outlays report for July showed larger than expected Personal Income growth (0.3%; Briefing.com consensus 0.2%) and slightly hotter than expected Core PCE Price Index growth (0.2%; Briefing.com consensus 0.1%), which kept the yr/yr growth rate at 2.6%, unchanged from June. The brief post-data selling was reversed in short order, allowing a return to levels seen at the cash start. Not long ago, the market received the final reading of the University of Michigan's Consumer Sentiment Index for August, which ticked up to 67.9 (Briefing.com consensus 67.8) from 67.8 in the preliminary reading. Equities have started in positive territory with the Nasdaq (+0.9%) outperforming the S&P 500 (+0.6%).
• The final reading for the August University of Michigan Index of Consumer Sentiment crossed at 67.9 (Briefing.com consensus 67.8) versus the preliminary reading of 67.8.
  • The key takeaway from the report is that consumers' short-run and long-run economic outlook improved.
• Yield Check:
  • 2-yr: +2 bps to 3.91%
  • 3-yr: UNCH at 3.76%
  • 5-yr: +1 bp to 3.67%
  • 10-yr: -1 bp to 3.86%
  • 30-yr: -1 bp to 4.14%