Bond Market Update

Losses Widened

• U.S. Treasuries trade on their lows after widening their initial losses. Treasuries followed their lower start with a sideways drift before sliding to fresh lows in reaction to today's batch of economic data. That batch fit in line with what was seen earlier in the night as the flash reading of the September Manufacturing PMI for the U.S. (47.0; prior 47.9) showed an accelerating contraction while the Services PMI (55.4; prior 55.7) also decreased from August's final reading but was still comfortably in expansionary territory. Longer tenors were at the forefront of the initial weakness, but the belly is now slightly behind. Equities are off to a modestly higher start with the S&P 500 (+0.3%) keeping pace with the Nasdaq (+0.3%).
• Yield Check:
  • 2-yr: +5 bps to 3.62%
  • 3-yr: +5 bps to 3.52%
  • 5-yr: +7 bps to 3.55%
  • 10-yr: +7 bps to 3.79%
  • 30-yr: +6 bps to 4.13%