Bond Market Update

Short End Ahead

• Longer-dated U.S. Treasuries hover near their opening levels after seeing some post-PPI volatility while shorter tenors are closer to their morning highs. Treasuries started the day with modest gains that were extended in immediate reaction to the PPI report for December (0.2%; Briefing.com consensus 0.3%), which was cooler than expected. The market diverged after the initial move, with longer tenors returning to their opening levels while the 2-yr note trades just below its post-PPI high. Equities are off to a higher start, encouraged by the sanguine PPI reading.
• Yield Check:
  • 2-yr: -3 bps to 4.37%
  • 3-yr: -3 bps to 4.47%
  • 5-yr: -3 bps to 4.59%
  • 10-yr: -1 bp to 4.79%
  • 30-yr: UNCH at 4.98%