Bond Market Update

Short End Remains Ahead

• Longer-dated Treasuries have spent the early portion of today's session in a sideways range near their opening levels while the 2-yr note has shown an early continuation of yesterday's relative strength, having climbed to a fresh high for the day. That said, other tenors have risen off their lows over the past 30 minutes, so they too are seeking to make a move into positive territory. The market received a few domestic economic reports over the past 20 minutes, starting with flash Manufacturing PMI (50.1; prior 49.4), which showed a return into expansion, and flash Services PMI (52.8; prior 56.8), which showed a deceleration in the pace of growth. Not long ago, the Existing Home Sales report for December (4.24 mln; 4.21 mln Briefing.com consensus) came in ahead of expectations while the final reading of the University of Michigan's Consumer Sentiment Index for January (71.1; Briefing.com consensus 73.0; prior 74.0) was revised lower from the initial estimate. Equities are off to a flat start with the S&P 500 trading little changed, holding onto a 2.1% gain for the week.
• Yield Check:
  • 2-yr: -2 bps to 4.26%
  • 3-yr: -3 bps to 4.32%
  • 5-yr: -1 bp to 4.43%
  • 10-yr: UNCH at 4.63%
  • 30-yr: UNCH at 4.87%