Bond Market Update

Trying to Bounce

• U.S. Treasuries have spent the early portion of the session in a slow rise off their opening lows with shorter tenors leading the bounce. Treasuries received an initial boost after today's first batch of data featured a slightly smaller than expected increase in December Retail Sales (0.4%; Briefing.com consensus 0.5%) and a larger than expected increase in weekly jobless claims (217,000; Briefing.com consensus 212,000; prior 203,000). Shorter tenors have paced the early move, though the 10-yr note has also reached a fresh high for the day while the long bond has been a bit more resistant to the buying. Treasuries of most tenors reached fresh highs in recent trade, responding to comments from Fed Governor Waller, who told CNBC that continued disinflation could open the door to a rate cut in the first half of the year and that as many as four cuts could be made this year. He added that he doesn't expect tariffs to have a significant impact on inflation. The comments crossed the wires just as the market received an in-line Business Inventories report for November (0.1%; Briefing.com consensus 0.1%) and a better-than-expected NAHB Housing Market Index for January (47; Briefing.com consensus 45).
• Yield Check:
  • 2-yr: +1 bp to 4.27%
  • 3-yr: UNCH at 4.34%
  • 5-yr: UNCH at 4.45%
  • 10-yr: +1 bp to 4.66%
  • 30-yr: +1 bp to 4.89%