Bond Market Update

Opening Gains Maintained

• U.S. Treasuries have spent the initial two hours of action in a sideways range, defending their opening gains. Treasuries attempted to build on their opening gains during the first few minutes of trade, but found resistance right as yields dipped below their lows from Monday. Economic data released today, which included a widening in the advance international goods trade deficit for December (to -$122.1 bln from $103.5 bln), a decrease in advance retail inventories (-0.3%), and a decrease in advance wholesale inventories (-0.5%) had no immediate impact on the market, but it prompted the Atlanta Fed to lower its GDPNow forecast for Q4 GDP to 2.3% from 3.2% in the previous estimate. Equities are seeing some early pressure with the Nasdaq (-0.6%) trailing the S&P 500 (-0.3%) ahead of this afternoon's FOMC Statement.
• Yield Check:
  • 2-yr: -1 bp to 4.20%
  • 3-yr: -2 bps to 4.24%
  • 5-yr: -2 bps to 4.32%
  • 10-yr: -3 bps to 4.52%
  • 30-yr: -3 bps to 4.76%