Bond Market Update

Market Remains Resilient

• U.S. Treasuries are mixed after seeing some volatility in immediate reaction to the release of the August CPI report, which matched headline expectations and included a slightly hotter than expected core reading. Treasuries fell to lows after the report crossed the wires with shorter tenors leading the slide. However, the entire complex began bouncing about 20 minutes after the report was released with longer tenors turning positive in recent trade while the 2-yr note remains modestly lower. The rebound off starting lows is consistent with what has been seen so far this week, but today's move is even more impressive since the early pressure followed the release of hard economic data. Equities are off to a lower start with the S&P 500 (-0.9%) and the Dow (-1.5%) leading the weakness while the Nasdaq (-0.2%) outperforms.
• Yield Check:
  • 2-yr: +1 bp to 3.62%
  • 3-yr: -3 bps to 3.44%
  • 5-yr: UNCH at 3.43%
  • 10-yr: -1 bp to 3.64%
  • 30-yr: -1 bp to 3.95%